Impact of Double Entry Book keeping on Management of Small-scale Business in Nigeria a Case Study of Selected Small-scale Businesses in Afikpo Urban, Ebonyi State
ABSTRACT
Accounting has variously been described as the language of business. This is in recognition of the fact that without accounting, determining organizational performance would have become a mirage. Accounting provide fundamental information about a business so that interested parties and in particular investors can make informed decision regarding that business firm. This paper therefore appraises the accounting skills needed by small-scale businesses for sustainable economic development in a developing nation using Afikpo Urban in Ebonyi state as a focal point. The paper aims to ascertain the fundamental accounting skill needed by small-scale businesses in Nigeria and to determine the benefits accruable to the firms who acquire these skills. The main instrument used was questionnaire the mean and standard deviation. Results and finding revealed that small scale business men donot keep proper books of account, they keep records of names of account, they keep records of names of debtors and creditors which is not enough to ascertain financial position. Conclusively, they are confronted with impact arising from inexperienced and untrained book-keepers who end up keeping faulty and the necessity of financial records for easy communication of new ideas. Following the outcome of this study, it is therefore made known that there is a strong positive relationship between accounting records keeping and performance of small-scale businesses. Accounting records keeping is essential for decision making which invariably affects performance of small-scale business. It is recommended that the owners and mangers of the small-scale business should embrace proper accounting records keeping practices for effective financial performance in their business.
CHAPTER ONE
- INTRODUCTION
1.1 GENERAL DESCRIPTION OF THE AREA OF STUDY
Businesses can be classified in various ways using different parameters. Some of the known parameters used I classifying businesses include: their sizes, their nature and modes of operation, their location and area of coverage, , their assets base, as well as their capital base. These attributes have resulted in businesses being classified as small-scale and large-scale. The small-scale businesses make up a vital part of our business systems today and employs more people than the government and large-scale businesses.
In Nigeria, the small-scale businesses provide the most important vehicle for both the government and large-scale businesses to thrive. The small-scale businesses in Nigeria contribute significantly to the national economy and growth by the volume of employment they provide to the citizenry and by the amount of tax revenue it remite to the national coffers. However, there is most often the issue of how much tax liability to be paid by these small-scale businesses
The tax authorities often reject the returns and accounts prepared by these small-scale businesses and table them as incorrect because it is believed that the small-scale businesses have the capacity, the skills and proficiency to prepare accounts and retunes to meet the requirements of the tax authorities. These is therefore the need to evaluate the accounting skills needed for sustainable development of the small-scale businesses in Nigeria especially in Afikpo urban in Ebonyi state which is assumed to have the highest number of small-scale businesses in the country.
However, the paper considers impact of double entry book-keeping on management of small-scale businesses in Nigeria in the following sub-headings;
- Historical development of double entry book-keeping in Nigeria
- Meaning of double entry book-keeping
- Objectives of double entry book-keeping
- Problems of double entry book-keeping in Nigeria
- Meaning of small-scale businesses
- Importance of small-scale businesses to Nigeria economy.
- Impact of double entry book-keeping on management of small-scale businesses in Nigeria.
1.2 HISTORY OF CASE STUDY/ORGANIZATION
Government are often seen making so much efforts in developing the small-scale businesses. This enormous effort stem from the fact that the activities of the small-scale business contribute enormously to gross domestic product employment generation and manpower development of the country.
However, in (Afikpo urban) there is no consensus or acceptable definition of small-scale business as each author defined it on his own perspective of who is small” of “big” because what is considered “small” to “Mr. A” may be “big” to “Mr. B” vice versa.
In (Afikpo urban) some people would undoubtedly consider all businesses that had not more than a specified number of employees (5 to 10) to be small businesses is one that operates only in the local area and still others would classify business as small by the kind of firm such as the local drug store, dress shop, neighbourhood store or shoe makers of the street.
Despite the numerous roles small-scale business paly in the community or nation the effectiveness of small-scale businesses is still being undermined by many factor in Afikpo urban which include problem of finance, poor record keeping, poor business accountability, poor planning, lack of experience, poor management, and lack of manpower skilled among others.
1.3 STATEMENT OF THE PROBLEM
The condition of double entry keeping on management of small-scale businesses in Nigeria especially in (Afikpo urban Ebonyi state) before was that majority of the respondent did not kept business accounting records. Records are kept on cash basis. Accounting records are very essential for decision making and majority of respondent do not prepare yearly financial statement.
The conditions of double entry book-keeping on management of small-scale businesses in Nigeria now is that accounting records keeping is essential for decision making now. It is also found that accounting records keeping is now increase the chance of the business operating and achieving success, and control of cash in the business.
The gap between them is that finding showed that there is a strong positive relationship between accounting records keeping wand performance of small-scale businesses. This implies that accounting record keeping affects performance of small – scale businesses.
1.4 OBJECTIVE OF THE STUDY
The main objective of this study is to investigate the impact of double entry book-keeping on management of small-scale businesses in Nigeria.
- To tell the historical development of double entry book-keeping in Nigeria
- To say the meaning of double entry book-keeping
- To identify the objective of double entry book-keeping.
- To identify the problems of double entry book-keeping in Nigeria
- To tell the meaning of small-scale businesses.
- To mention the importance of small scale businesses to Nigeria economy.
- To tell the impact of double entry book-keeping on management of small-scale businesses in Nigeria
- RELEVANT RESEARCH QUESTIONS
In order to achieve the objective of this study, the following research question were drawn.
- Could the management and staff of the small-scale businesses be able to tell the historical development of double entry book-keeping on management of small-scale businesses in Nigeria?
- Could the management and staff of the small-scale businesses be able to say the meaning of double entry book-keeping?
- Could the management and staff of the small-scale businesses be able to tell the objectives of double entry book-keeping?
- Could the management and staff of the small-scale businesses be able to say the problems of double entry book-keeping in Nigeria?
- Could the management and staff of the small-scale businesses be able to say the meaning of small scale businesses?
- Could the be able to tell the importance of small-scale businesses to Nigeria economy?
- Could the be able to tell the impact of double entry book-keeping on management of small scale businesses in Nigeria?
- SIGNIFICANCE OF THE STUDY
The need for research work of the impact of double entry book-keeping facing small-scale businesses has not been satisfied yet. It is therefore, anticipated that this study will contribute to the satisfaction of this need. It is also expected to add in the stock of literature already existing in the area.
The study, impact of double entry book-keeping on management of small-scale business in Nigeria is of important to management entrepreneurs, students and societies in general.
To managers who wish to know the impact of double entry book-keeping facing the management should after going though this work be able to identify them and address them to the interested parties when they visit their organization.
1.7 DELIMITATION (SCOPE) OF THE STUDY
The area covered by the researcher is Afikpo Urban, in Ebonyi State Nigeria, because the writer wants to carry out a detail investigation into impact of double entry book-keeping on management of small-scale businesses in Nigeria.
While carrying out this study the researcher was confronted with many problems, paramount among them was insufficient fund which did not give the researcher the opportunity to travel when to more comprehensive study.
The time interval given to this project is not sufficient enough to enable the researcher to carry out a comprehensive research work considering the fact that the academic calendar for the semester is too short.
The poor state of the school library facilities and other sources of secondary data was also a problem.
1.8 ASSUMPTION
It was in trying to arrive at a reasonable conclusion assumes the following:
- It was accepted the owners and mangers should be well trained in order to keep the statement of their financial position.
- It was assumed that the owners and managers should have accurate records and receipt and disbursement to check honesty and reliability of employee.
- It was also claimed that the owners and manger should be advised to encourage the employment of members into their institution and adopt uniform accounting reporting system which enable companies to known their financial position.
1.9 DEFINITION OF UNFAMILIAR TERMS/TERMINOLOGY
Some technical words were used which some of them need definition for easy comprehension. The explanations of these words are given below;
- Book-keeper:
According to Oxford Advanced Learner’s Dictionary 6th Edition 2000 of current English by as Hornby. Defined book-keeper as a person whose job is to keep an accurate record of accounts of a business.
- Impart:
According to Oxford Advanced Learner’s Dictionary 6th Edition 2000 of current English By A.S Hornby, defined impact as the powerful effect that something has on some body or something or act 0of one object hithing another object.
- MANAGERS:
According to Oxford Advanced Learner’s Dictionary 6th Edition 2000 of current English By A.S Hornby, defined manager as the people who control or manage businesses or firms.
- Owners:
According to Oxford Advanced Learner’s Dictionary 6th Edition 2000 of current English By A.S Hornby, defined owners as those who have or possess to small-scale businesses.
- Incompetence:
According to Oxford Advanced Learner’s Dictionary 6th Edition 2000 of current English By A.S Hornby, defined incompetence as the lacking of the skill or knowledge to do a job or perform an action correctly or to a satisfactory standard.
- Improper:
According to Oxford Advanced Learner’s Dictionary 6th Edition 2000 of current English By A.S Hornby, defined improper as the wrong recording of finical statement or not current for a particular use
