Yes, it is possible to prepare the profit and loss account and the balance sheet from the incomplete book of accounts, with the help of Conversion Method. According to this method, first of all incomplete records are converted into double entry records. In case of incomplete records, details of some transactions are easily available like cash sales, cash purchases, creditors, debtors. However there are number of transactions, the details of which may not be available directly. Yet, these details can be found out indirectly or logically. Things which are required to prepare balance sheet can be ascertained through conversion method in a chronological order as follows. (i) The first step is to find out the opening capital, If opening capital is not given, opening statement of Affairs will be prepared which gives the Opening Capital. (ii) The second step is to prepare Cash Book that gives the opening or the closing cash and bank balance. (iii) The next step is to prepare Total Debtors Account. It is prepared in order to find out one of the missing figures, such as credit sales, opening debtors, closing debtors and cash received from debtors. (iv) The subsequent step is to prepare. Total Creditors Account to ascertain one of the missing figures, such as credit sales, opening creditors, closing creditors and cash paid to the creditors. (v) The last step is to prepare final accounts. On the basis of the missing figures ascertained in each of the above steps, along with other mentioned information. Trading and Profit and Loss Account and Balance Sheet can be prepared.