Accounting is the lifeblood of an organization. No organization can be imagined without it. It is something that affects people in their personal life, just as much as it affects large organization and also small organization. We all use accounting ideas when we plan what are we going to do with our money and we have to plan how much of it we will spend and how much we will save. All these are possible by accounting. It is a part and parcel tool of an organization. It helps the management about the financial condition and to provide necessary information. No organization can exit today’s comparative business world without accounting. In case of sole proprietorship business accounting is also used. The business organization in which a single person owns, manages and controls all the activities of the business is known as sole proprietorship from of business organization. Here in this report we have emphasized on the accounting practice of sole proprietorship. This report highlights the different steps of accounting practice of sole proprietorship. Systematic way that company uses and this report gives us the chance to compare our academic knowledge with practical field. As a result we have selected some sole proprietorship business, which helps us to acquire our practical knowledge on communication systems in our practical life.

1. DEPARTMENT OF ACCOUNTING
Faculty of Business Administration and Management
Patuakhali Science and Technology University
Dumki, Patuakhali – 8602.
November 26, 2009
Md. Zakir Hosen
Assistant Professor
Department of Accounting and Information System
Faculty of Business Administration and Management
Patuakhali Science and Technology University
Subject: Transmittal of the report on “Sole proprietors’ perception towards accounting records”
Dear Sir,
It’s been a pleasure for us to submit here with our dissertation, which has been prepared under
the smart and dynamic leadership of a personality like you.
This report is a very important part for our study. If we analyze the financial statement of a sole
proprietorship we must gather new terminology and some new implementation of Accounting.
In completing the report we have tried our level best in imparting every available details of the
organization avoiding unnecessary amplification of the report.
With best regards,
Sincerely Yours;
(Md. Shahinuzzaman)
Leader (Group- Vigilance)
Student of Business Administration and Management

2. Acknowledgement
First we want to give thanks of almighty,
With profound regard we gratefully acknowledge our respected teacher Md. Zakir Hosen,
Assistant Professor, Department of Accounting and Information System, Faculty of Business
Administration and Management, Patuakhali Science and Technology University for his
generous help and day to day suggestion during the survey.
We like to give thanks especially to our friends & many individuals, for their enthusiastic
encouragements and helps during the preparation of this report.
We also available the opportunity to express our thanks and cordial esteem to the owners who
are very cordially give answer us.

3. s
Sl. No. Subject Page no.
1. Executive Summary 1
2. Executive Summary 2
3. Objective of the report 3
4. The limitation of the study 4
5. Methodology 5
6. Accounting process 6
7. Questionnaires 7
8. Section 1 information about entrepreneur 8
9. Section; 2 information about enterprise 9
10. Section; 3.1/3.2 accounting system 10-12
11. Section; 3.3 sales record 13-14
12. Section; 3.4 Expense record 15
13. Section; 3.5 Presentation of financial statement 16
14. Findings of the Report 17
15. Recommendations 18
16. Conclusion 19
17. References 20

4. Reports on
Sole proprietors perception
towards accounting records
Date of Submitted 10 may, 2009
Patuakhali Science and Technology University,Dumki-8602

5. Submitted to:
Md. Zakir Hosen
Assistant Professor, Department of Accounting &
Information System
Patuakhali Science and Technology University
Dumki, Patuakhali.
Submitted by:
Group Leader: Md. Shahinuzzaman
(Vigilance)
(Level-I, Semester-I)
BBA Program
Faculty of B.A.M
Patuakhali Science and Technology University

6. 1
Executive Summary
Accounting is the lifeblood of an organization. No organization can be imagined without it. It is
something that affects people in their personal life, just as much as it affects large organization
and also small organization. We all use accounting ideas when we plan what are we going to do
with our money and we have to plan how much of it we will spend and how much we will save.
All these are possible by accounting. It is a part and parcel tool of an organization. It helps the
management about the financial condition and to provide necessary information. No organization
can exit today’s comparative business world without accounting. In case of sole proprietorship
business accounting is also used. The business organization in which a single person owns,
manages and controls all the activities of the business is known as sole proprietorship from of
business organization. Here in this report we have emphasized on the accounting practice of sole
proprietorship. This report highlights the different steps of accounting practice of sole
proprietorship. Systematic way that company uses and this report gives us the chance to compare
our academic knowledge with practical field. As a result we have selected some sole
proprietorship business, which helps us to acquire our practical knowledge on communication
systems in our practical life.

7. 2
Introduction
A sole proprietorship is a one-person business that is not registered with the state as a
corporation or a limited liability company (LLC).Sole proprietorships are so easy to set up and
maintain that you may already own one without knowing it. For instance, if you are a freelance
photographer or writer, a craftsperson who takes jobs on a contract basis, a salesperson who
receives only commissions, or an independent contractor who isn't on an employer's regular
payroll, you are automatically a sole proprietor. However, even though a sole proprietorship is
the simplest of business structures, you shouldn't fall asleep at the wheel. You may have to
comply with local registration, business license, or permit laws to make your business legitimate.
And you should look sharp when it comes to tending your business, because you are personally
responsible for paying both income taxes and business debts. A sole proprietor may do business
with a trade name other than his or her legal name. In some jurisdictions, the sole proprietor is
required to register the trade name or "Doing Business As" with a government agency. This also
allows the proprietor to open a business account with banking institutions

8. 3
Objective of the report:
As business executive of future, we should need to gather knowledge on Macroeconomics. We
should not concern our lesson only in classroom but to implement it in practically that will help
us in our future life. A clear objective helps to prepare a well-decorated term paper in which
others take the right type of decision. Similarly our honorable course teacher Md. Jakir Hosen
gives us an assignment. The main purpose of the report is to know the recording process or
accounting system of sole-proprietorship business surrounding Borishal city. Although, it is
seems to be very difficult to get our needed information from these sole-proprietorship
businessman of Borishal, because most of the sole-proprietorship do keep accounting
information or keep business record as we need however we try out best to get our essential
information to fill the objective of the report. And to reach or to achieve desired goal; the main
objective of the repot are following
a) To know about sole-proprietorship business.
b) To know about the entrepreneur.
c) To know about accounting system or recording process of sole-proprietorship business
d) To know the present condition of sole-proprietorship business surrounding Borisal.
e) To enrich knowledge about its accounting system.
Among all adjective of this report the main object is to know the accounting record of sole-
proprietorship business and tried our best to touch the every objective and to reach at our desired
point.

9. 4
The limitation of the study
No work on the world is complete without limitations. The study we made hane some
limitations. In spite of having some limitation we all have tried our best to fulfill our report. In
preparing the report the limitation we found are as follows—
i) The scope of surveying shop was limited.
ii) In some cases they are not willing enough to give information.
iii) Exact information may not be got from the survey.
iv) There existed shortage of time because of the pressure of examination.
v) They try to maintain their secrecy about their business.
vi) As we made the survey informally and without making the businessman pre inform.
So they had time consideration.
vii) Their given information did not match our questions properly.

10. 5
Methodology
It is very much relevant that a partial job is done by following proper methods. As we tried to
make a rational report we have followed the proper methods to perform our job. Every study is
done on the basis of primary data and secondary data. Our presented report is related with
primary data because for making this report we have familiar with field survey. Basically, we
have tried to make this report by following the information we have collected through field
survey.
Some specific steps have been taken by us to prepare this report. At first we have planned about
the overall study. We were given ten different schools to observe the present situation .We have
collected data from all the given institutes. Then we have analyzed these data by group working.
After that we have tried to make a report on present situation of those organizations. Here the
process is given below:
Figure: The reporting process
Planning
Analyzing DataReporting
Collecting Data
Questioning

11. 6
Accounting process:
The accounting steps that recur each accounting period in the life of a business and that begin
with recording of transactions and produced through posting the recorded amounts, preparing a
trial balance, preparing a work sheet, preparing financial statements, preparing and posting
adjusting and closing entries, and preparing a post closing trial balance is known as accounting
cycle. The accounting cycle can be shown as follows:
Figure: accounting process
Identification
Journalization
Posting to ledger
Worksheet*
Financial
Preparation of trial
Closing entries
Adjusting entries
Reversing entries*
Post closing trial

12. 7
Questionnaires:
Questionnaires are very useful part for making a report. Single set of questionnaire was used to
collect information for study. Every attempts was made to make the questionnaire all-inclusive I
e, all possible answers were given in the questionnaire.
In section number 1at this section provides information about proprietors. At this section
mention different types of question about only proprietors e.g., name of the proprietors,
educational level of proprietors, background of study, origin of the organization, tax
identification number, value added tax and also asked a question e.g. Do you think accounting
record is important for your business? All the proprietors answer promptly yes.
In section 2 at this section provide information about enterprise. At this section asked different
types of questions to proprietors about their enterprise such as nature of business, trade license,
sources of capital, operating year of the business, and last on is number of employees.
In section 3 is related to accounting system for their business. At 3.1asked different types of
general questions which is related for their business such as have any books of account, how they
keep records, in which process maintain accounting, do their organization have any written
accounting policies and procedures, have any proper documents for support transaction, and
which book they maintain.
At stage 3.2 asked questions for their inventory record such as do they keep any purchase record,
do they maintain inventory record, how do they order to purchase inventory, and how do they
prevent theft of inventory.
At stage 3.3 asked question about their sales record such as, do they keep any sales record, how
do they prevent theft of cash.
At stage 3.4 asked different types of questions about their expense record such as, do they
maintain expense record, do they maintain depreciation charge on assets, are they salaries
expense recorded, when they takes anything from the business for personal use, then is it
recorded separately, are they recorded transportation expense daily, are they recorded
entertainment expense daily.

13. 8
Section 1 information about entrepreneur
Figure: survey report about entrepreneur
All the above information is collected by our group members who provide only proprietors.
While collecting data the owner say that they are very much conscious about their business. Most
of them marginal educated and are commerce background. So when we asked them do you think
accounting is very much important for your business? All the proprietors answers without delay
that accounting process maintain is very essential part for their business. Soles proprietors
owners maintain their accounting process informally. Although they record all the accounting
process informally but it is related to the accounting process.
Name of the
businessman
Name of
the
business
Educational
qualification
Background
of education
Origin of
business
Importance
of
accounting
tax
Sukumar saha MS
monindra
lal saha
store
B.Com Commerce Self
started
Yes yes
Mohebullah(Sobuj) Murali
Store
Others Madrasa Self
started
Yes No
Swapan Saha Trenath
Vandar
SSC Commerce Self
started
Yes Yes
Somvonath Saha Joykali
Vandar
HSC science Inherited Yes Yes
Sisir Bonik Ms. Kartik
Bonik
SSC Science Inherited Yes Yes
Moslem Howlader Sahin flour
mill
Below SSC Arts Inherited Yes Yes

14. 9
Section; 2 information about enterprise
Name of the
owner
Name of the
organization
Nature Trade
license
capital Running
year
employee
Suvonath
Saha
Joy Kale
Vander
Merchandising yes Both self
and lone
Less 10 3-4
Sukumar
Saha
Ms.
Monindra
Lal Saha
store
Merchandising yes Both self
and lone
50year 4-5
Mobullah(
Sobuj)
Murali store Merchandising yes Both self
and lone
25yerar 4-5
Sopon Saha Trenath
Vander
Merchandising yes Both self
and lone
20year 1-2
Shisir
Bonik
Ms. Cartik
Bonik
Merchandising yes Self 20year 1-2
Moslem
Howladar
Sahin flour
mill
Merchandising No others Less 3 year others
Figure: survey information about enterprise
A sole-proprietorship business or enterprise have some separate models or activities those are
separate than other business. Our mentioned nine sole-proprietorship organization shows that
each has their separate accounting process. As for example we say that some doesn’t have trade
silence and the capital formation capacity are vary from sole-proprietorship to sole-
proprietorship. Maximum organization collects capital as their chosen way and gets enough. The
organization running year is different form sole-proprietorship to sole-proprietorship. Even the
number of employee in the organization is varied and after all the whole operating system is
varying organization to organization.

15. 10
Section; 3.1/3.2 accounting system
Accounting system is a process by which one organization recorded his all transactional report
and prepared organizational report. Every organizational activities and its success depend on
proper recording system that means proper accounting system. And one organization recorded its
financial terms into two types of recording way.
a) General record.
b) Inventory record
And if we want to know about an organization properly or specifically then we have to know
accounting system of that organization. For these reason when we visited completed our survey
on sole proprietorship business, we asked about the organizational accounting system. Basically
we gave extra priority on its recording process. Do they keep any record or not? Types of
recording process, do they keep any purchase or sales record; does it/ do they follow proper
recording procedure or not, do they keep voucher invoice, GL, or different types of inventory
etc. these every information are differ from one organizational to another that shown in bellow as
a box to imagine about those organization at a glance.
Name
Of the Business
Name of
the
Enterprise
Books for
Accounting
Records
System
Describing
Accounting
Written
Policy
Proper
Document
Voucher,
Invoices
and
Time
Sheets
Shisir Bank No Informal Manual No No yes
Shukumar Shaha yes Informal Manual No No yes
Shomvonath
Shaha
yes Informal Manual No No No
Swapon Shaha yes Formal Manual yes No yes
Su-Shanto Shaha yes Informal Manual No No No
Moslem Houlader yes Informal Manual No No yes
Mohibulla yes Informal Manual No yes No

16. 11
Name
Of the
Business
Name
of the
Enterp
rise
GL Establishm
ent cost
Cash
receive
journal
A/R
journal
A/P
journal
Sales
journal
Purchase
journal
Shisir Bank No yes No yes No No No
Shukumar
Shaha
No No No yes yes yes yes
Shomvonath
Shaha
No No No No No No No
Swapon
Shaha
yes No yes yes yes No yes
Su-Shanto
Shaha
No yes yes yes yes yes yes
Moslem
Houlader
No yes yes yes yes yes yes
Mohibulla
Name
Of the Business
Name of the
Enterprise
Purchase
Record
Inventory Record Purchase
Inventory
Shisir Bank yes yes On the Basis of
Record
Keeping
Shukumar Shaha yes yes On the Basis
Counting
Shomvonath Shaha No No On the Basis
Counting
Swapon Shaha yes yes On the Basis of
Record
Keeping
Su-Shanto Shaha yes yes On the Basis
Counting
Moslem Houlader yes yes On the Basis
Counting

17. 12
And, at the ending period of this section, we want to mention here that most of the organization
has not proper or formal procedure to prevent theft or inventory. But they mention some system
which they take to prevent theft of inventory as following.
a) By proper viewing the business
b) By taking extra care.
c) By depending on the basis inventory record.
d) By recording transaction
e) And depend on personal imagination.

18. 13
Section; 3.3 sales record
Figure: survey report about sales record
We all know that the main purpose of sole proprietorship businessman is to achieve profit. If
anyone want to achieve profit he must sells his product. If he wants to find out his profit properly
he must record the sale of products.
For sole proprietorship business; the question no 3.3 or analysis of sales record, it implies that in
Barisal’s most of the sole proprietorship business does not maintain sales record and some of the
sole proprietorship business maintain sales record. The organization which does not maintain
sales record, it does not take any formalities to prevent theft of cash. When we survey these
business organizations we saw that most of the business owners handle their cash box. They
were ensured us that although they are maintain the cash by him so there is no way of theft.
Name of the
Organizations
Name of the
Proprietors
Maintain
Sales
Record?
Way of prevent theft
of cash
Way of determine
sales revenue (if
does not keep
sales record)
01. Sahin Flower Mill Moslem Howlader Yes By closing daily
transaction
……………………..
……………………..
02. M/S Monindra Lal
Saha Stores
Sukumur Saha Yes He keeps daily sales
record in his sales
book. And also
identify the dailies
cash with his sales
book.
……………………..
……………………..
03. Trenath Vander Swapon Saha No Do not take any
formalities
On the basis of idea
04. Joy Kale Vander Somvo Nath Shaha No Owner maintain the
cash
On the basis of
dailies cash.
05. M/S Kartik Bonik Shisir Bonik Yes No formal step ……………………..
……………………..
06.Mohebullah Sobuj Murali Stores Yes He keeps his daily
sales record and
maintain cash by
himself
……………………..
……………………..

19. 14
On the other hand, the organization which maintains sales record, it must follow some rules that
prevent the cash theft. These are discuss below—
a. By closing daily transaction
b. keeps daily sales record in sales book and also identifies the dailies cash with sales book.
. c. Maintaining the cash by own self.
All the above discussion we can analyze that the organization which maintain the daily sales
record in his daily sales book get or achieve more profit than the another

20. 15
Section; 3.4 Expense record
Figure: survey report about expense record
For recommendation, the questionnaire was given to top grocery shop. Our main target was those
who had enough knowledge in maintaining accounting system in his business. As the field of
study was limited within the Barisal city, it was decided that the information would be collected
by direct interviews. Nine interviewers having sufficient knowledge about these topics through
their course AIS were appointed to collect the information. The survey was conducted at April
30, 2009. Question was hand delivered to the owner or manager of the organization. All the day
the key terms were made clarified to the respondents. Interviewers were instructed to go on the
following day. Further clarification was made where needed and finally questionnaire was
collected. The data were analyzed by using the mean, median, mode and standard deviation.
Name of
the owner
Name of the
organization
Maintain
expense
record
Depreciation
charge on
assets
periodically
Salary
expense
record
Personal
expense
record
separately
Transportation
expense
record daily
Entertainment
cost record
daily
Suvonath
Saha
Joy Kale
Vander
Yes Don’t have
any
depreciation
charge
system on
assets
Yes Yes Yes No
Sukumar
Saha
Ms.
Monindra
Lal Saha
store
Yes No Yes No No No
Mobullah(
Sobuj)
Murali store Yes No Yes No No No
Sopon
Saha
Trenath
Vander
Yes No Yes No Yes No
Shisir
Bonik
Ms. Cartik
Bonik
Yes No Yes No No No
Moslem
Howladar
Sahin flour
mill
Yes Yes Yes Yes Yes Yes

21. 16
Section; 3.5 Presentation of financial statement
Name of
the owner
Name of the
organization
prepare often Comply
with bank
Owners
equity
Balance
sheet
Income
statement
Suvonath
Saha
Joy Kale
Vander
yes yearly not yes no yes
Sukumar
Saha
Ms.
Monindra
Lal Saha
store
yes yearly not yes yes yes
Mobullah(
Sobuj)
Murali store yes yearly not yes yes yes
Sopon
Saha
Trenath
Vander
no yearly no no no
Figure: survey information about financial statement
Every sole-proprietorship organization must need to maintain financial statement, for not only
his own record but also to maintain his accounting cycle and show the organization current and
previous economic position. We see the organization is frequently unaware about keeping
financial statement and they are unaware about the current financial position. For receiving loan
form bank and other financial organization, financial statement is needed for every sole-
proprietorship organization. On the other hand we observed that every sole-proprietorship keep
record as their own way by this they may able to keep his financial record but this uncompleted
record are unable to make financial statement and owners equity statement and income statement

22. 17
Findings of the Report:
Every study which is conducted has some findings which are very interesting implications of the
study. So, our present study conducted on “Sole proprietors towards accounting records” has also
some interesting implications which are as follows:
Sole proprietor maintains manual and old system for reporting financial statements to
interested parties.
Sole proprietor follows no rules for preparing income statement.
They follow no method to record to charges depreciation for their plant assets.
Sole proprietor four statements, (about)
1. Profit and Loss Account.
2. Balance Sheet.
3. Statement of Changes in Equity.
4. Balance Sheet
In the year of 2007 the Sole proprietor has been able to earn enough profit without or
very little accounting process.
The Sole proprietor has been able to emerge business largely in maintaining this
recording system but they understand the lacking of accounting system.

23. 18
Recommendations:
After completing the report on “Sole proprietors towards accounting record” we are in position
to recommend the following implications-
They should not use accounting methods for preparing their financial statement and other
documents. Most of them are unaware about the accounting process for measuring
financial position.
The accounting system namely income statement, balance sheet, owners equity
statement, are much unknown to them but subconsciously they maintain this.
Most of the businessman is continuing business more than twenty years, for this
accounting is needed for the businessman but that is unknown to them.
The necessarily omits many items that are of financial value to the businesses but cannot be
recorded objectively. So, should give proper concern to make financial reports that the report
should include all necessary information.

24. 19
Conclusion
Sole proprietor business maintains very weak and uncompleted financial report for
maintaining accounting process. Also keep his financial record very subconsciously. By
watching their financial statement it is very tough to determine something but they can easily
keep and understand all the records. We have operated our study on their organization to
know how they maintain their accounting record and we say that our motto is completely
success as we hope. We prepare our report as a man can get enough idea about the sole
proprietorship organization by reading our report.

25. 20
References:
Information given by the sole proprietor’s owner in Barisal’s glossary sops.
Term paper format given our course teacher ZAKIR HOSEN sir.
Jerry J. Weygandt, Donald E. Kieso, & Paul D. Cimmel, Accounting Principles, John
Wiley & Sons, Inc, 7th
Edition.
Jerry J. Weygandt, Donald E. Kieso, & Paul D. Cimmel, Intermediate Accounting, John
Wiley & Sons, Inc, 11th
Edition.
Roger H. BHermanson, James Don Edwards, & Michale W. Maher, Accounting
Principles, Irwin, 5th
Edition.