Conversion Method reconstructs accounts from incomplete records by converting available single-entry or partial records into double-entry accounts. Process: Identify all available information (cash book, bank statement, supplier invoices, customer receipts), Reconstruct key accounts (Debtors, Creditors, Sales, Purchases, Expenses), Close accounts to Trading and P&L Accounts, Determine profit/loss. Reconstruction Technique: For Sales: Opening Debtors + Sales (reconstructed) - Bad Debts - Collections = Closing Debtors. Rearrange: Sales = Closing Debtors - Opening Debtors + Cash Collections + Bad Debts - Discount Allowed. For Purchases: Opening Creditors + Purchases (reconstructed) - Discount Received - Cash Paid = Closing Creditors. Rearrange: Purchases = Closing Creditors - Opening Creditors + Cash Paid + Discount Received. For Expenses: Opening Accrual + Expense (cash) + Closing Accrual - Opening Prepaid = Total Expense. Benefits: Allows calculation of all missing figures, Provides complete accounts, Enables preparation of financial statements. Specific Accounts: Create individual accounts for debtors, creditors, each expense, inventory using formulas. Verification: Opening Capital + Profit - Drawings = Closing Capital (must match from Statement of Affairs). Exam tip: Master the reconstruction formulas for debtors, creditors, and expenses; practice working backward from closing balances to determine unknown transactions; verify all reconstructions match from Statement of Affairs.