The Usefulness of Accounting System In The Running Small-Scale Industries In Owerri Municipal Imo State

Abstract

The basic concern of this work is to find out the usefulness of accounting system in the running of small scale industries in Owerri Municipal using ABC transport as a case study. Four research questions was formulated to guide the study. A total of 300 questionnaires were distributed among the respondents and were all returned, tabulated and converted into percentage, finding from the analysis revealed that accounting system has played significant roles in the running of small  and medium industries as evidenced from ABC transport performance. Based on findings conclusion was made that accounting staff should apply accounting principles while recording their business transaction and at the time of repairing the financial statements.  They should duly followed them in a way accounting system operates.

CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY

Over the years, many small-scale industries have only succeeded in getting their business shortly after the beginning of business due to inability to fix a proper accounting system. The funds invested hardly provide anything due to mismanagement of funds, lack of financial forecast and misappropriation of fund. In most cases, the equity of the shareholders in much lower than borrowed funds. Invariably, these loans attract high interest rate which affects the profit of small scale industries. Most small scale industries in spite of their awareness of the implication of   misdirects the use of the money borrowed, sometimes for personal use thereby suffering well intended project or starving them of funds. On the other hand, most of them will not like to keep proper record of business operation and they may decide to operate many years without knowing the financial position of the industry. Some would not even know the different between the money they have invested into the business and loans borrowed. A lot of them are not educated in the accounting services but a few of them who are aware seem to think  that  it does not  matter whether a good accounting system is in stored, provided  that they can employ accounting clerk to act as steward by keeping records of day to day transactions. How than can such an industry relates the present operations to past and future ones of similar business,   it means there, that there can hardly be any short term plans different.

In this same vein, the few of them that employ accountants do so without allowing the professional practice.

This means that the accountant should work under the control of the management who has no regard for proper accounting system. It is important to note however that is part of the country most of these small Scale Industries   are run by individual or family basis hence they believed that the pattern of expenditure in the industry is purely a family affair. A good accountant is the one that is capable of keeping proper records of financial transactions of the company at all times. It deals with financial forecast, cost and budgetary controls and is always very conscious of debt servicing and loan repayment, invariably, accounting system is an information gathering system which records and measures economic event that takes place in business by analysis and interpreting. This information is so that those in control of the business are able to base their decision on realistic accounting of profit or loss is on involved process where large amount of capital are invested cost assets such s land and building, plant and machinery, stock tec. It is important that accurate accounting information is available and professional qualified accounting such data which will enable the management take usefulness of proper accounting system in small scale industries need not to over emphasized.

STATEMENT OF THE PROBLEM                                      

it has been ascertained that , most small scale industries fail to keep proper accounting system and also fail to observe basic accounting procedures. As a result, they are not able to portray the ex act financial position of their business. This tend to impede the ability of the industry to obtain the much need bans from the financial institution and other sources for expansion and diversification. The financial statement, such as the profit and loss accounting, the balance sheet and the cash flow statement of small scale industries cannot easily be prepared. Under such circumstance, annual profits cannot readily be determined. The main research problem in this work is to account for the reason behind their inability to keep proper accounting records, it is important to state that the absence of proper records does not only impair the growth of the small scale industry but also as stated earlier, reduces their chances of obtaining credit facilities from the financial institutions and other fund lenders, it is obvious that a cash served small scale industry is bound to  encounter difficulties in the its attempts to expand and/ or diversify its operation.

PURPOSE OF THE STUDY

The major purpose of this study was determine the record  keeping of small scale business operation in Owerri Municipal Imo state specifically the study seeks to :

1. Ascertain the usefulness of accounting system in running of small-scale industries in Owerri Imo State.
2. Evaluate whether small-Scale Industries can operate successfully for a very long time in absences of accounting system.
3. Examine whether accounting system help in the development of managerial skills.
4. Evaluate how accounting system can grow the small scale industries in Owerri Municipal Imo state.

RESEARCH QUESTION

1. How useful is accounting system in running of small scale industries In Owerri Municipal Imo State?
2. Can small Scale Industries operate successfully for very loan time in the absence of accounting system?
3. To what extent can account system help in the development of managerial skills in small Scale Industries?
4. How can accounting system assist in the growth of small Scale Industries in Owerri municipal Imo State?

SIGNIFICANCE OF STUDY

The main characteristics of this study are to educate and enlighten our small Scale Industries   in the way of prudently managing the available resources as to attain set objectives. Secondly, it will be immense value to business owner or managers, especially financial managers wishing to improve the profit of their business it will equally make the proprietor of firms realize the importance of keeping accurate records, which will directly create a chance of success not wit standing the highly competitive of business environment. In addition, s it will serve as a valuable reference material to the students at all level especially those wishing to investigate more on the topic or related topic. Moreover, it is of benefit for researcher will bring to focus the degree of effectiveness and efficiency of the management skills of the small Scale Industrialists in Imo State.

SCOPE OF THE STUDY

The scope of this study is the area of the usefulness of accounting system in the running of small Scale Industries   in Owerri municipal Imo State.

The study is limited to forty (40) selected small Scale Industries    in Owerri Municipal Imo State. The researcher restricted the study to Owerri Municipal because of limited finance and time and therefore, services as a sample reprehensive of the entire state and indeed Nigeria as a whole. The convenience of date collection is another reason behind the research’s choice of the study.

Pages:  65

Category: Project

Format:  Word & PDF

Chapters: 1-5

Material contains Table of Content, Abstract and References