Ascertaining Missing Figures — Total Debtors, Total Creditors, Bills and Cash Summary

The Statement of Affairs method gives only the overall profit figure — it says nothing about individual missing numbers such as credit sales, credit purchases, or drawings, which a trader with incomplete records frequently has not recorded directly. The way accountants recover these individual figures is a simple but powerful idea: any ledger account will always balance if it is genuinely complete, so if every item on an account except one is known, the missing item can always be found as the balancing figure.

This technique is applied to a handful of standard accounts, reconstructed entirely from whatever scraps of information are available (cash book entries, correspondence, physical counts, and the trader's own recollection).

Total Debtors Account. This account pools together all transactions with debtors as a group (as if there were only one debtor) to find either the credit sales for the year or the closing balance of debtors, whichever is not otherwise known.

If opening debtors, cash received, discount, bad debts, returns, and closing debtors are all known, the missing credit sales is found as the balancing figure. If instead credit sales are known but the closing balance is not (for example, if debtors could not be physically confirmed at year end), the closing debtors becomes the balancing figure instead.

Total Creditors Account. The same idea applied to creditors, to find either credit purchases or the closing balance of creditors.

Bills Receivable Account and Bills Payable Account. Where a business also deals in bills of exchange, a similar account is prepared to find bills received (drawn) or bills accepted during the year, or the closing balance of bills outstanding, again by treating whichever single figure is unknown as the balancing item — cash collected/paid, dishonoured bills, and opening/closing balances being taken from whatever records exist. …