How the Accounting Procedure is carried out for incomplete Records

You might have not learned or even heard about the accounting for incomplete records hence we are here to provide you complete knowledge regarding the concept and procedure that is followed by the different companies to maintain their incomplete records.
You should not become shock regarding this term as it is an alternative for the book-keeping single entry system, a business which is completely carried out for recording the business transaction only in a single entry system.

There are multiple examples for the organizations who maintain such procedure taking in to the account of a shopkeeper near to you home, he is also an accountant as he maintains his books of accounts though he may not be familiar with the techniques procedure and professional way for recording business transaction but hence he keep the records in the method of book keeping (a single entry system).

There are some main difference between the incomplete recording of business transaction and double entry book-keeping method which is discussed below:

1. In the double entry book-keeping the each business transaction is recorded in two sides one is debit and other is credit, in an transaction one side is debited and other is credited

2. Here in the incomplete record keeping system in the most of cases only a single aspect is determined either it would be a debit or credit no affect for that transaction is shown over here.

3. In the Double Entry System the five heads of accounts are kept in the mind and with the vision of those five heads business transactions are carried out such as assets, liabilities, capital and revenue and expenditure. The complete books of accounts are maintained.

4. In the incomplete book keeping there is no concept of recording the business transition regarding the five heads of accounts.

5. The Trail Balance in maintained in the double entry book-keeping system as to prepare the financial statements which is generally prepared at the end of fiscal year.

6. In the Single Entry book-keeping or incomplete record keeping it is not possible for the anybody to prepare or maintain the trail balance as the only one aspect on a transaction is carried out ignoring the effect of that transaction, hence there will be no financial statement prepared by such person.

7. Maintaining the complete books of accounts helps you to provide true, fair and accurate picture of the business, the financial position of the company can be judged with such maintenance.

8. No earning capacity or financial position can be ascertained by the single entry record keeping system.

Difference between Receipts and Payments Accounts and Income and Expenditure Account

In the Income and expenditure account it reflects the income of a year, it is always shown on the right side and whereas for the expenditure it is shown on the left side.

Income and expenditure accounts are generally prepared by the non-profit agencies such as a charity firm, any organization which is working for the social welfare not does not have the motto to earn profit but to serve only.
Income and expenditure is pretty similar to the profit and loss account that a company maintains whose motto is to earn profit and to find out the excess or deficit as the case may be.

The Receipts and Payments Accounts are prepared for those companies or entities who carry their business on cash basis only their transactions are exclusively on cash bases.

Receipts and Payments method is a simpler format to record transaction, they do not believe on the transaction which rely on future say for suppose that as compare to other they do not purchase or sale their commodities on account basis, it is dealt only on cash.
The Receipts and Payments Account is formatted as it is prepared with a T shaped format in which two sides are of concern one for the debit and one for the credit, the debit is on the right hand whereas the credit on the left hand side.

The cash receipt are on the debit side and the cash payments that are made to parties are maintained at credit side.
There are some features regarding the preparation of receipts and payments accounts and income and expenditure account which are discussed as follows:

One of the major and I believe it is the main feature that the receipts and payments account is totally rely on the cash base method it does not deal with accrued and prepaid expenses.

The receipts and payments account is usually classified as the summary of cash book
In the receipts and payments account it shows the opening balance that is known as cash in hand or bank or bank overdraft on the payment side.

The income and expenditure either it is on the debit side or credit side
But in the cash of income and expenditure which is generally known as the summary of profit and loss account it does not have any opening or closing balance at all.

The whole receipts and payments accounts whether it is capital or revenue by nature are included in this account.