OxfordAQA A-Level Accounting: Accounting for organisations with incomplete records (9615)

This study guide teaches section 3.2.4, Accounting for organisations with incomplete records, of the OxfordAQA International AS and A-level Accounting (9615) specification, Version 1.2, for International AS exams May/June 2025 onwards and International A-level exams May/June 2026 onwards. Section 3.2.4 is International A-level only content. The specification lists it among the sections assessed on Paper 3: Financial Accounting, and notes that A-level assessments build upon the knowledge and skills developed over the AS course.

Useful pages: the OxfordAQA A-level Accounting hub, the printable checklist and the free diagnostic quizzes. When this page makes sense, consolidate with the revision notes and the practice questions. Section 3.2.4 reuses AS skills: control accounts from verification of accounting records, layouts from sole trader financial statements and ratio work from analysis and evaluation of financial information. The exam preparation page explains how the papers are set out.

All businesses and figures here are invented. The specification says question papers use the US dollar ($), so every amount on this page is in dollars.

What section 3.2.4 covers

Content (3.2.4, International A-level only)	Skills you need
The calculation of profit where there are insufficient records to prepare income statements	Find profit (or loss) by comparing capital at two dates, using statements of affairs
How accounting techniques are applied in the preparation and analysis of financial statements for a business with incomplete records	Recover missing figures using: control/total accounts; cash and bank accounts; four ratios (gross profit margin, mark up, profit in relation to revenue, inventory turnover); depreciation of non-current assets; profit or loss on disposal of non-current assets; and the financial statements
The benefits and limitations of maintaining accounting records using different systems including single and double entry records	Compare single entry with double entry and judge which suits a given business

Single entry and incomplete records

Under double entry each transaction is posted to two accounts, giving a trial balance and then the financial statements. Many owners keep only a cheque book, a folder of invoices and a diary of takings: single entry or incomplete records. The accountant applies double entry logic after the event. With only asset and debt lists at two dates, you can find one profit figure from the movement in capital. With bank statements, cash notes and balances at both dates, you can rebuild every income and expense figure and prepare full statements.

Profit from statements of affairs

A statement of affairs sets out what the business owns and owes at one date, valued from counts, invoices and estimates rather than taken from a ledger. Capital is whatever is left over:

Capital = Assets - Liabilities

Capital moved during the year because of profit and the owner’s own movements of money. Strip those out and what remains is profit:

Profit = Closing capital - Opening capital + Drawings - Capital introduced

Drawings include cash, private cheques and goods taken from the shelves.

Worked example 1: Tobiah Grinstead, bicycle repairs

Tobiah keeps no ledger. Year ended 30 June 2026.

	1 July 2025	30 June 2026
Tools and equipment (valuation)	4,800	5,600
Inventory of parts	1,350	1,720
Trade receivables	420	560
Insurance prepaid	–	120
Bank	2,180	overdrawn 340
Cash	95	130
Trade payables	610	830
Electricity accrued	–	75
Loan from a relative	–	2,500

He took 350 a week for 52 weeks and parts costing 240 for his own bike. He paid in 3,000 from the sale of his private car.

                             1 Jul 2025    30 Jun 2026
Total assets                      8,845          8,130
Less total liabilities             (610)        (3,745)
Capital                           8,235          4,385

Change in capital   4,385 - 8,235          = (3,850)
Add drawings        (350 x 52) + 240       = 18,440
Less capital introduced                    = (3,000)
Profit for the year                          11,590

Capital is 3,850 lower than a year ago, but Tobiah removed 18,440 and put in 3,000, so the business earned 11,590. The overdraft sits with the liabilities, and the relative’s loan is a liability, not capital introduced. This method yields profit only: no revenue, expense or ratio figures.

Control/total accounts, cash accounts and bank accounts

Each missing figure sits in an account you can rebuild in outline: credit sales in the trade receivables total account, credit purchases in the trade payables total account, takings spent before banking in the cash account, and an unrecorded payment or unknown balance in the bank account. The figure that makes the two sides agree is the answer.

Worked example 2: Lumenara Textiles, year ended 31 March 2026

What survives:

• Customers: owed 5,240 at the start and 6,010 at the end. Debts of 480 were written off, 90 interest was charged on overdue accounts, and 1,150 owed by a customer who also supplies Lumenara was set off against the amount Lumenara owed that supplier.
• Suppliers: owed 7,330 at the start and 6,980 at the end; discounts received 540.
• Bank statements: opening 3,410, closing 17,610. Receipts: credit customers 63,870; takings paid in 21,400. Payments: suppliers 48,620; rent 8,400; a sewing machine 4,950; private cheques to the owner (stubs lost).
• Cash box: 180 at the start and 210 at the end. Wages 6,240 and cleaning 610 were paid from takings before banking.

             Trade receivables total account
Balance b/d          5,240   Bank                   63,870
Interest charged        90   Contra (payables)       1,150
Credit sales (bal)  66,180   Irrecoverable debts       480
                             Balance c/d             6,010
                    71,510                          71,510

              Trade payables total account
Bank                48,620   Balance b/d             7,330
Discounts received     540   Credit purchases (bal) 49,960
Contra (receivables) 1,150
Balance c/d          6,980
                    57,290                          57,290

                      Cash account
Balance b/d            180   Bank                   21,400
Cash sales (bal)    28,280   Wages                   6,240
                             Cleaning                  610
                             Balance c/d               210
                    28,460                          28,460

                      Bank account
Balance b/d          3,410   Trade payables         48,620
Trade receivables   63,870   Rent                    8,400
Cash                21,400   Sewing machine          4,950
                             Drawings (bal)          9,100
                             Balance c/d            17,610
                    88,680                          88,680

Revenue = 66,180 + 28,280 = 94,460; purchases = 49,960; drawings = 9,100 (the statement gave the closing balance, so the bank account balanced on the missing payment). The contra appears in both total accounts; interest charged is a receivables debit because it adds to what customers owe.

Ratios as a source of missing figures

The ratios named in 3.2.4 are defined in section 3.1.8, which refers to the OxfordAQA guide “Formulae for accounting ratios”. That guide gives:

Ratio	Formula
Gross profit margin %	Gross profit / Revenue × 100
Markup %	Gross profit / Cost of sales × 100
Profit in relation to revenue %	Profit for year / Revenue × 100
Rate of inventory turnover (days)	Average inventory / Cost of sales × 365

Average inventory is normally the average of the opening and closing inventories. Turnover as a number of times is the same comparison inverted: cost of sales / average inventory. Markup is measured against cost, margin against selling price:

margin % = 100 x markup / (100 + markup)     markup % = 100 x margin / (100 - margin)

Worked example 3: a cash shortfall at Pelham Rise Gifts

The owner suspects an assistant of taking cash. Every item is sold at a markup of 40%. For the year: opening inventory 14,300, purchases 47,600, closing inventory counted 16,900. Takings banked were 59,880, and 1,200 of takings paid a casual worker before banking.

Cost of sales     = 14,300 + 47,600 - 16,900   = 45,000
Expected revenue  = 45,000 x 140/100           = 63,000
Takings accounted = 59,880 + 1,200             = 61,080
Shortfall                                      =  1,920

The likely cash missing is 1,920. Multiply cost of sales by 1.40; the equivalent margin is 40/140 = 28.57%.

Worked example 4: using the financial statements (Quillfeather Stationers)

Inventory sheets are lost. Known: opening inventory 12,100; purchases 137,800; rate of inventory turnover 36.5 days; markup 60%; total expenses 55,080. Find closing inventory, revenue and profit in relation to revenue.

36.5 days means average inventory = cost of sales x 36.5/365 = cost of sales / 10
Let closing inventory = C
Cost of sales       = 12,100 + 137,800 - C        = 149,900 - C
Average inventory   = (12,100 + C) / 2
(12,100 + C) / 2    = (149,900 - C) / 10
60,500 + 5C         = 149,900 - C,  so  C        =  14,900
Cost of sales       = 149,900 - 14,900           = 135,000
Revenue             = 135,000 x 160/100          = 216,000
Gross profit        = 216,000 - 135,000          =  81,000
Profit for the year = 81,000 - 55,080            =  25,920
Profit in relation to revenue = 25,920 / 216,000 x 100 = 12.00%

Check: gross profit margin = 81,000 / 216,000 = 37.5%, and 60 / 160 = 37.5%, so the ratios agree.

Depreciation and disposal of non-current assets

Worked example 5: Thornacre Landscaping’s vehicles

At 1 January 2025 vehicles cost 64,000, with accumulated depreciation of 22,550. Policy: 20% reducing balance on vehicles held at the year end, a full year’s charge in the year of purchase and none in the year of sale. The bank statements show 12,150 received for a truck bought two years earlier for 20,000, and 28,000 paid for its replacement. Find the result on disposal, the 2025 charge and the closing carrying amount.

Depreciation on truck sold = 4,000 + 3,200              =  7,200
Carrying amount at sale    = 20,000 - 7,200             = 12,800
Loss on disposal           = 12,800 - 12,150            =    650

Vehicles at cost, 31 Dec   = 64,000 - 20,000 + 28,000   = 72,000
Accumulated dep. remaining = 22,550 - 7,200             = 15,350
Depreciation for 2025      = (72,000 - 15,350) x 20%    = 11,330
Closing carrying amount    = 72,000 - (15,350 + 11,330) = 45,320

The 650 loss is an income statement expense. Had the closing cost been known and the replacement price lost, the replacement would be the balancing figure.

Building a complete set of statements

A full reconstruction is a chain in which each result feeds the next:

opening statement of affairs        -> capital at the start
bank and cash summaries             -> missing receipts, payments and balances
total accounts                      -> credit sales and credit purchases (add cash items)
amounts owing / prepaid, both dates -> each expense for the year
asset accounts                      -> depreciation and profit or loss on disposal
income statement                    -> profit for the year
statement of financial position     -> closing capital = opening capital
                                       + capital introduced + profit - drawings

A balancing statement of financial position confirms the figures. Practice question 9 works a full set.

Single entry and double entry compared

Consideration	Single entry	Double entry
Cost and skill	Little time, no training, no software	Bookkeeping time, skill and often software fees
Accuracy check	None; a slip in the cash book stays hidden	Trial balance exposes many errors, though omissions and compensating errors still pass
Information	Profit perhaps only as one total, rebuilt by an accountant for a fee	Income statement and statement of financial position every period; ratios available
Credit control	Hard to see who owes what	An account for each customer and supplier
Theft and fraud	Missing cash or inventory is hard to detect	Totals and reconciliations show gaps sooner
Evidence for lenders	Weak	Reliable statements support a loan application

Test each point against the business in the question, then reach a decision.

Common errors

• Leaving goods taken for own use out of drawings.
• Listing a bank overdraft, or a loan from a relative, anywhere other than liabilities.
• Posting a contra to one total account only, or interest charged as a credit to receivables.
• Mixing up turnover in days with turnover in times.
• Taking the markup percentage of revenue, which treats it as a margin.
• Balancing the bank account on the closing balance when the statement already gives it.
• Charging depreciation on an asset in its year of sale, against the stated policy.

Official syllabus

OxfordAQA International AS and A-level Accounting (9615) specification, Version 1.2, for International AS exams May/June 2025 onwards and International A-level exams May/June 2026 onwards (OxfordAQA): section 3.2.4, Accounting for organisations with incomplete records.