1. ACCOUNT FROM INCOMPLETE RECORD
DEFINE DOUBLE ENTRY SYSTEM.
A system in which two fold aspect (Dr & Cr) of each transaction is recorded.
DEFINE SINGLE ENTRY SYSTEM.
System in which only one aspect of transaction is recorded or both aspect of transaction is
recorded or sometime no aspect of transaction is recorded
FORMULA USED TO CALCULATE NET PROFIT OR LOSS UNDER SINGLE ENTRY
SYSTEM.
Net Profit / Loss = (Closing Capital + Drawings + Interest on Drawings – Further Capital –
Interest on Capital – Opening Capital
N.P / N.L = C.C + D + IOD – FC – IOC - OC
WHAT DO YOU MEANT BY STATEMENT OF AFFAIRS?
It is just like a balance sheet which is used to calculate opening capital or closing capital
or
A statement of affairs is a statement of all assets and liabilities and capital prepared under single
entry system.
DIFFERENTIATE BETWEEN STATEMENT OF AFFAIRS AND BALANCE SHEET.
A statement of affairs is a statement of assets liabilities and capital prepared under incomplete
records where as a balance sheet is a statement of assets liabilities and capital extracted from
ledger balances maintained under double entry system.
WRITE DOWN THE NAMES OF THE METHODS WHICH ARE USED IN SINGLE
ENTRY SYSTEM TO CALCULATE PROFIT.
There are two methods which are used in single entry system to calculate profit.
 Increased net worth method
 Conversion method
WHAT DO YOU MEANT BY CONVERSION METHOD IN SINGLE ENTRY SYSTEM?
In this method single entry system data is converted into double entry system by ascertaining
missing values and profit is calculated by preparing trading and profit and loss account.
DEFINE NET WORTH METHOD.
Method used to calculate net profit or net loss in single entry system by comparing capital at the
beginning and end of the year
Net profit = Adjusted Closing Capital – Opening Capital
PUNJAB COLLEGE OF COMMERCE PROF. HAFIZ MUHAMMAD NAWAZ PAGE 1

2. ACCOUNT FROM INCOMPLETE RECORD
FORMAT STAMEN OF PROFIT & LOSS
M/S…
Statement of profit & loss
For the year ended 31st December xxxx
DETAILS AMOUNT (Rs.)
Closing capital XXX
Add: Drawings XXX
Add: Interest on Drawings XXX
Less: Fresh Capital {XXX)
Less: Interest on Capital (XXX)
Adjusted Closing Capital XXX
Less: Opening Capital (XXX)
Net Profit/ Net Loss XXX
PUNJAB COLLEGE OF COMMERCE PROF. HAFIZ MUHAMMAD NAWAZ PAGE 2