Topic 5.6 – Incomplete Records
Learning objective & assessment mapping
Students will apply the techniques of mark‑up , margin and inventory turnover to reconstruct missing figures when a set of accounting records is incomplete, and evaluate the reliability of the reconstructed data. This addresses the Cambridge IGCSE Accounting (0452) objectives:
AO1 – Knowledge: recall symbols, formulas and relevant accounting principles (e.g., matching, prudence).AO2 – Analysis: manipulate the given data, calculate missing figures and prepare a profit‑and‑loss account / balance sheet.AO3 – Evaluation: discuss the assumptions made and the reliability of the reconstructed statements.
1. Why records may be incomplete
Loss or damage of source documents (sales invoices, purchase invoices, receipts).
Only summary information retained – e.g., total sales are known but individual sales are not recorded.
Small‑business owners keep partial records for convenience or to save time.
Deliberate simplification for tax purposes (rounding, omission of low‑value transactions).
Transition from manual to digital systems – data may be missing during migration.
2. Symbol key
Symbol Meaning
SP Selling price (sales revenue) CP Cost price (purchase cost) GP Gross profit = SP – CP COGS Cost of goods sold OS Opening stock CS Closing stock P Purchases during the period AI Average inventory = (OS + CS) ÷ 2 IT Inventory turnover ratio = COGS ÷ AI MU Mark‑up % = (GP ÷ CP) × 100 MG Margin % = (GP ÷ SP) × 100
3. Key formulas (with derivations)
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