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Incomplete records

Accounting equation

If a business does not maintain its accounting records in double-entry form, with the
production of a trial balance, the preparation of the statement of profit or loss and
statement of financial position may require some figures to be ascertained from other
records and information. For example if the owner of a business has not kept records
of their drawings other available figures available that would enable this drawings
figure to be determined.

The accounting equation could be usefully employed in this situation:

Assets Capital Liabilities

A change in the value of capital can be calculated at any time. A change in capital for
a sole trader business can be caused by only three things:

 an introduction/withdrawal of capital

 net profit or loss for the period

 drawings.

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