Q.What are the limitations of incomplete records ?

Because incomplete records ignore the dual aspect for many transactions, they are unscientific and unreliable — no trial balance, no true profit, weak control and no legal acceptance.

Limitations of incomplete records:

1. Lack of dual aspect — both aspects of every transaction are not recorded, so the system is unscientific and incomplete.
2. Arithmetical accuracy cannot be checked — a trial balance cannot be prepared, so errors go undetected.
3. True profit cannot be ascertained — a proper trading and profit & loss account cannot be prepared from complete data; profit is only estimated.
4. Correct financial position not known — a reliable balance sheet cannot be drawn up because full asset/liability data is missing.
5. Difficult to detect fraud and errors — absence of complete records makes misappropriation hard to trace. …