QS Study

Calculation of Missing Figures in Conversion Method of single entry into double entry system

The information which is needed for preparing the final accounts is not straight obtainable from the incomplete records. Therefore, we require finding out such missing figures by preparing relevant accounts. Let us learn how such missing figures can be extracted from unfinished records by preparing the relevant accounts. The important ones are discussed below:

  1. Calculation of total purchases or creditors in the beginning or at the end of the year.
  2. Calculation of total sales or debtors in the beginning or at the end of the year.

(i) Ascertainment of Total Purchases:

Total purchases are calculated by adding cash and credit purchases. Cash purchases, are given in Cash Book. Credit purchases are calculated by preparing total creditors account.

(ii) Ascertainment of Total Sales:

Total sales are calculated by adding cash and credit sales. Cash sales are given in cash book. For ascertaining the amount of credit sales, the total debtors account should be prepared.

(iii) Ascertainment of balances of sundry debtors and sundry creditors:

If credit sales and credit purchases are given, the opening or closing balances of debtors and/or creditors can be ascertained by preparing total debtors account and total creditors accounts.