(93)-CALCULATIONS FOR INCOMPLETE RECORDS

Calculations for Incomplete Records

In practice there should not be any missing item in the opening balance sheet of the business, because it should be available from the preparation of the previous year’s final accounts.

Credit sales and debtors

If business does not keep a record of its sales on credit, the value of these sales can be derived from the opening balance of trade debtors, the closing balance of trade debtors, and the payments received from the trade debtors during the period. Credit sales are:

Payments received from trade debtors -------------X
(+) Closing balance of trade debtors -----------------X
(-) Opening balance of trade debtors ----------------(X)
= Credit sales of the period -------------------------------X

Purchases and trade creditors

A similar relationship exists between purchases of stock during a period, the opening and closing balances for trade creditors, and amounts paid to trade creditors during the period.
If we wish to calculate an unknown amount for purchases, the amount would be derived as follows:

Payments to trade creditors ---------------------------X
(+) Closing balance of trade creditors -------------X
(-) Opening balance of trade creditors ------------(X)
= Purchases during the period -----------------------X