CA Foundation · Accounting · Accounts from Incomplete Records
Which statement correctly distinguishes a Statement of Affairs from a Balance Sheet?
A Statement of Affairs is prepared like a Balance Sheet but from incomplete records, so some figures come from memory, estimates or physical verification rather than from a Trial Balance. It lists assets and liabilities, and the balancing figure is the proprietor's capital.
- AA Statement of Affairs is prepared from a Trial Balance of double entry books
- BA Statement of Affairs is prepared from incomplete records, with some figures based on memory or estimatesCorrect
- CA Statement of Affairs shows only assets, not liabilities
- DA Statement of Affairs is a ledger account of the proprietor's capital
Explanation
A Statement of Affairs is drawn up like a Balance Sheet but from incomplete records, so values may come from memory, estimates or physical verification. It lists both assets and liabilities, and the balancing figure is capital. It is not prepared from a Trial Balance.
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