Q.'Is it possible to prepare the profit and loss account and the balance sheet from the incomplete book of accounts kept by a trader'? Do you agree? Explain.

Yes — with a cash summary and the personal accounts of debtors and creditors, the missing figures can be derived using double-entry logic, and full final accounts can then be prepared. …

Yes, it is possible, provided enough information can be gathered. When a cash summary is available together with information about the personal accounts of debtors and creditors, the missing figures needed for final accounts can be worked out using the logic of double entry:

• Opening capital — from the opening statement of affairs.
• Credit purchases — as the balancing figure of the total creditors account.
• Credit sales — as the balancing figure of the total debtors account.
• Bills accepted / bills received — from the total bills payable and total bills receivable accounts.
• Cash and bank balances / other missing receipts and payments — from the summary of cash. …