1. 1
SMALL ENTERPRISE OWNERS/MANAGERS ATTITUDE TOWARDS THE
APPLICATION OF MAJOR ELEMENTS OF ACCOUNTING
SYSTEM (A CASE STUDY IN MEKANE SELAM TOWN)
A senior essay submitted for the partial Fulfillment of bachelors of Arts degree in
Accounting and Finance
BY; Meseret Bogale
Bluemark College, Mekaneselam Compus
Department of Accounting and finance
May, 2023
Mekane Selam, Amara regional state
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TABLE OF CONTENT page
CHAPTER- ONE- Introduction
1.1 Background of the study____________________________________________________6
1.2 Statement of the problem____________________________________________________ 9
1.3 Objective of the study_____________________________________________________ 10
1.3.1General objective________________________________________________________ 10
1.3.2 Specific objective_______________________________________________________ 10
1.4 Scope of the study________________________________________________________ 10
1.5 Limitation of the study___________________________________________________ 10
1.6 Significance of the study__________________________________________________ 10
CHAPTER- TWO – Related literature review
2.1 Introductions____________________________________________________________ 12
2.2 Needs for accounting_____________________________________________________ 13
2.3 Accounting system _______________________________________________________ 13
2.4 Business transaction (events)______________________________________________ 13
2.5 Accounting cycle________________________________________________________ 14
2.6 System of bookkeeping___________________________________________________ 15
2.5.1 Double entry system of bookkeeping________________________________________ 15
2.6.2 Single entry system of bookkeeping________________________________________ 15
2.7 Inventory system_________________________________________________________16
2.7.1perpetual inventory system________________________________________________ 16
2.7.2 Periodic inventory system ________________________________________________ 16
2.7.3 Inventory valuation_____________________________________________________ 16
2.8 Accounting system and control for small enterprise _______________________________ 17
2.8.1 Internal control system___________________________________________________18
2.8.2 Internal control concepts and issues _________________________________________19
2.9 Prior studies on small enterprises ___________________________________________19
3. 3
CHAPTER- TRHEE
Research Methods
3.1 Research design_________________________________________________________ 21
3.2 Participant of the study____________________________________________________ 21
3.3 sampling techniques______________________________________________________ 21
3.4 Sample size_____________________________________________________________ 21
3.5 Data type and source______________________________________________________ 22
3.6 Data collection techniques________________________________________________ 22
3.7 Data Processing, Analysis and Interpretation__________________________________ 22
CHAPTER- FOUR
DATA ANALYSIS AND INTERPRITATION_____________________________________ 23
CHAPTER- FIVE
SUMMARE, CONCLUSION AND RECOMMENDATION
Summary __________________________________________________________________ 31
Conclusion_________________________________________________________________ 33
Recommendation ____________________________________________________________ 33
References_______________________________________________________________ 35
Appendix ________________________________________________________________ 37
LIST OF TABLE
Table 1- Respondent’s background
Table 2- Preparation of financial statements
Table 3- Reasons for not preparing financial statement
Table 4- Attitude of owners/managers towards internal control
Table 5- Business transaction and its accounting treatment
Table 6- attitudes towards system of recording business transaction
Table 7-Attitude towards inventory system
Table 8 – Attitude towards accounting system
Table 9- owners/managers filling by not applying accounting system
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ACKNOWLEDGMENT
It is the grace, mercy, charity, forgiveness, help and kindness of the almighty of God that made
me alive, achieve this success and strength. Next to this I would like to thank all my teachers in
this accounting study.
In addition, I am thankful to all my family and friends for their moral and financial support. I
would also like to extend my thanks to Mekane Selam town small enterprise managers or owners
for their cooperation for filling the questionnaires.
Finally yet importantly, I would also want to extend my appreciation to everyone who supported
me at the preparation of this study.
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ABSTRACT
Small scale enterprises play a vital role in the economic development of any country. In
Ethiopia, most small scale enterprise owners/managers handle their business traditionally. This
study aimed at investigating the attitude of small enterprise owners/managers towards the
application of major elements of accounting system in Mekane Selam. The population of the
study consists of ‘82’small enterprise owners/managers. ‘46’ respondents were selected through
a stratified simple random sampling techniques. Structured questionnaire (both open ended and
close ended) was employed in the course of gathering relevant data for the study. Data were
analyzed by using percentage and frequency. The result indicates that most small enterprise
owners/managers have a positive tendency towards internal control and inventory system.
Moreover, it shows that a significant number of small enterprise owners/managers have a
tendency towards single entry system of bookkeeping and most of them do not prepare financial
statements for their enterprise. The study therefore concludes that small enterprise
owners/managers have a positive attitude to apply elements of accounting system when different
constraints solved and they were highly willing to learn more about how to keep accurate
records of their business transactions. Following this the study recommended that, the ministry
responsible for SEs development should initiate, in a more strengthen way, record keeping
training program for entrepreneurs running small business and bookkeeping in SEs should be
made mandatory to change their tendency in to practice and to make them beneficiary. Finally it
is recommended that Mekdela Amba University Mekane Selam Compus and Bluemark College
Mekaneselam Campus, specially accounting and finance department like that of law school,
should establish a free community service in bookkeeping institute to facilitate small enterprise
owners to apply accounting system in their enterprise.
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CHAPTER ONE: INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The contribution of small enterprises (SEs) to the economic development of most developing
countries is overwhelming. Providing employment opportunity for the country’s working
population, contribution to the government revenue generation through the payment of income
tax, As well as providing income in terms of profit and wage to households, has been the
ultimate hallmark of SE’s to a developing country, of which Ethiopia is no exception.
Small enterprises are an important ingredient for stable and equitable growth in any national
economy. Ethiopia takes the development and expansion of SEs as the main way to solve many
of the social problems. Yet despite, specific global efforts to strengthen the SE sector these
business face a number of problems, particularly in developing countries. In Ethiopia, one of the
main problems of ESs may be their accounting practices and access to finance (TAFA, 2011).
Studies show that it is hard for the small enterprises to access finance from the financial
institutions, since they lack proper financial record as requirement (GIBRET, 2013). Providers of
finance and other interesting parties often rely on information before making the formal decision
either to invest or not to invest in a given business. An adequate Accounting system will generate
the needed information for whatever purpose. It is recommend by many researchers that SEs
keep detail accounting records and Audits their financial statements on annual basis.
For most developing countries achieving low unemployment, improving income level and
reducing poverty which eventually lead to economic success largely depends on whether SE's are
doing well or not. As GIBERT says, for the SEs also to do well there is the need for them to
attract and secure finance. Providers of finance will not invest or provide funds unless they are
assure that they will not lose their investment. Most providers of finance assure themselves with
accounting information generated from an adequate accounting system in order to reduce risk.
Unfortunately because owners manage SEs in Ethiopia, they sometimes believe, they have less
need for financial accounting information because of their personal involvement in the day-to-
day operation.
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An accounting system consists of the personnel, procedures, technologies and records used by an
organization to develop accounting information and to communicate this information to decision
makers. Therefore, the basic purpose of accounting system is to meet the organization’s need for
information as efficiently as possible (Williams et al, 2006).
Accounting information is used by every profit seeking business organizations that uses
economic resources and by nonprofit seeking organizations. The accounting system used by
profit seeking organization may viewed as an information system designed to provide relevant
financial information on the resource of business and the effect of the use of these resources
(Fess warren, 1984).
There are five basic elements of an accounting system; These are source documents, input
devices, information processors, information storage and output devices (Adams University
College, 2014). Source documents provide basic information to process by the accounting
system. Input devices captures information from source document and enables its accounting
system. Transfer to the information-processing component. Information processing is a system
that interprets transfers and summarizes information for use in analysis and reporting. Output
devices are the mean to take information out of an accounting system and to make it available to
users. Generally, for this study purpose, the above elements viewed as an accounting cycle. This
study was also focuses on other different major element of accounting system those are internal
control and inventory system.
Accounting cycle is a complete sequence of accounting procedures, used to record, classify and
summarize accounting information in financial reports, that is repeated in the same order during
each accounting period( WILLIAMS et al,2006).it includes
● Journalizing transaction
● posting to ledger accounts
● preparing trial balance
● making end of period adjustment
● preparing an adjusted trial balance
● preparing financial statements
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● journalizing and posting closing entries and
● preparing an after closing trial balance
Management needs assurance that accounting information it receives to be accurate and reliable.
This accuracy comes from the company’s system of internal control. This study was also focused
on general control activities.
Inventors are asset items held for sell in the ordinary course of business or are goods that will be
used or consumed in the production of goods to be sold. The description and measure of
inventory required careful intention because the investment in inventory is frequently the largest
current asset of merchandise and manufacturing business (DONALD KIESO, 1998). Thus in this
study the researcher tried to understand and describe the attitude of small enterprise managers
towards the application of those major elements of Accounting system.
1.2. STATEMENT OF THE PROBLEM
Today it is impossible to manage business operation without accurate and up-to-date accounting
information. managers and employees, lenders, suppliers and government agencies are rely on
the information contained in two financial statement each not more than one page in length.
According to JILL HUSSY and ROGER HUSSY (1999), cost and management accounting, all
efficiently managed organization needs to keep some form of accounting system. For big
organization like limited companies there are legal requirement that must be adhered. For small
enterprises, it is important to keep some form of accounting records for taxation and decision
making purpose.
Previous researches has indicate that small firms are a group of business driven by the attitude
and motivation of one person, tends to control all functional areas of the business and accord less
time to the accounting and finance function. This is often viewed as unimportant and thus
received less attention on the part of the owners (as cited in k padachi, 2012:2).
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The researcher’s personal observation also witnessed that most of small enterprise managers
handle their business traditionally. They do not have any knowledge of accounting/ modern
business. All large or small business have to establish accounting system in order to produce
financial statements so as to give precise information for personal/ groups in business to satisfy
external parties. In addition to this, accounting system provides information to understand better,
how business has get profit and help to management or organization to plan for future of the
business. To the best of the researcher’s knowledge, no specific researches have undertaken to
investigate small enterprise manager’s attitude towards the application of accounting system.
Hence, in this study the researcher tried to answer the following research questions.
What is the attitude of small business managers towards business event and the
accounting treatment?
Do the enterprise managers prepare crucial financial statements periodically?
What is the attitude of those enterprise managers towards internal control system?
What is the attitude of those enterprise managers towards inventory system?
What is the attitude of small enterprise managers towards Double entry bookkeeping
system?
Why managers apply major elements of accounting system?
1.3 OBJECTIVE OF THE STUDY
1.3.1 General objective
The general objective of this study was to evaluate the attitude of small enterprise managers
towards the application of major element of accounting system.
1.3.2 Specific objective
To assess the attitude of small enterprise managers towards business events and its
accounting treatment.
To find out whether the enterprise owners/managers prepare crucial financial statement.
To assess the attitude of enterprise owners/managers towards establishing internal control
system.
To assess the tendency of small enterprise owners/ managers towards inventory system.
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To assess the attitude of small enterprise owners/managers towards Double entry
bookkeeping.
To identify reasons which hinder owners/managers from applying accounting system.
1.4 SCOPE OF THE STUDY
This study was very important, if it would conducted over the country wide, but because of the
restriction of time and finance, it was intended to conduct in Mekane Selam town. Moreover, this
study focused on small enterprises; with employees 6-30, and which has a paid up capital for,
industrial sector from ETB 100,001 up to ETB 1.5million, and for services sector from ETB
50,001 up to ETB 500,000(ZEMENU et al, 2014) excluding high technological consultancy
services and other higher technological establishments.
1.5 LIMITATIONS OF THE STUDY
The researcher was face the following limitations
The time provided for the study was not enough for the researcher to collect all necessary
information
The financial means for the study was insufficient to conduct the study as the price of
everything in the market increased.
The respondents had heavy work and did not provide the information on time.
Some of the respondents did not understand the objective of the study and think
otherwise.
It was very difficult to get the particular location of small enterprise.
1.6 SIGNIFICANCE OF THE STUDY
This study has expected to use for the following significance.
It provides important information in accounting system as having knowledge of
Accounting system in running business is most important solution for the growth of
Business.
It gives important information on the important accounting system for the profitability of
enterprises.
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It would identify the reasons that hinder small enterprise managers from applying
accounting system.
It would indicate to the government, the intention of small enterprises managers towards
growth.
It might help other researchers who want to conduct a research on similar topics or area.
1.7 ORGANIZATION OF THE PAPER
This study has organized into five chapters, which consist of different categories. The first
chapter includes background, statement of the problem, objective of the study, scope of the
study, limitation of the study and significance of the study. The second chapter deals with review
of related literature. The third chapter is about research methods. The fourth chapter presents the
collected data analysis and the last chapter is about the summery, conclusion and
recommendation of the study.
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CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.1 INTRODUCTION
Small enterprises (SEs) defined in a variety of ways using various factors. Although many
countries around the globe seem to use common factors in their definition the degree of emphasis
and measures used differ quite considerably. These factors include number of employees,
volume of sales and the capital value of the business. In recent times, there has been some degree
of convergence in SEs definitions particularly in Europe.
The European commission defines SEs using a combination of employee numbers, annual
turnovers or balance sheet total and ownership. However, the above convergence does not
suggest in any way a common agreement of the specific numbers in terms of these variables.
To this end, different governments and writers in small enterprise definition differ considerably.
This difference influenced largely by two factors. These are population and stage of a countries
economic development and industry within which the SEs is competing (ZEMENU et al, 2014).
The definition of small enterprises in the developed world would differ from how SEs is defined
in the third world. For example, the accepted definition of small enterprise in USA is “an entity
with average annual gross revenue for the preceding three years not to exceed $15 million. The
Ethiopian government defines SEs based on the size of the capital and level of automation
(MSEs Strategy, 2004). Accordingly small enterprises are those business enterprises with paid up
capital of above ETB 20,000 and not exceeding ETB 50,000.
In the improved definition of MSEs, Ethiopian ministry of trade and industry and central
statistical authority(CSA) defines SEs according to the number of employees and capital as
follows( ZEMENU et al, 2014):industry sector with employees 6-30, and capital of ETB
100,001_ETB 1.5 million and service sector with employees 6-30 and capital of ETB 50,001
_ETB 500,000.
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The government of Ethiopia has recognized the importance of micro and small enterprises
development to the overall economic growth of country and poverty alleviation. It has
established micro and small enterprise development agency to coordinate and support this
sectors. According to proclamation number, 33/1998, the agency shall be involved in designing
policies and strategies for the development and expansion of micro and small-scale enterprises.
To this end many developing economy have developed and have been providing credit to poor
and small business through micro finance schemes. In Ethiopia, several institutions have
established and have been operating towards resolving credit access problem of poor particularly
those participate in small business activities. Since small enterprises has great role to the
economy of a given country, it matter to economy whether they work well or not. However,
without support of micro finance institutions small business may not well by them self due to
capital constraint. If a given small enterprise works well in addition to help of micro finance, it
also assumed that accounting system of the business to be well, which is the subject area of this
study.
2.2 NEEDS FOR ACCOUNTING
In a business organization, innumerable monetary transactions take place. Accounting keeps a
systematic record of such transactions and summarizes them through entries in various accounts.
A clear picture of functions of the business emerges from Accounting and it reveals what the
business owns, owes, profit and loss (NADHANI, 2000).
2.3 ACCOUNTING SYSTEM
The unabridged version of the random house dictionary provides more than a dozen of definition
for the term ‘system’. Paraphrasing and merging several of those definitions, a system is a
coordinated network of plans and procedures designed to achieve a stated goal in an orderly
effective and efficient manner. Not surprisingly, this definition applies very well to the typical
accounting system. From this accounting system is a systematic approach to collecting,
processing and communicating financial information to decision makers. This consists of the
methods and records established to identify, assemble, analyze, classify, record and report on an
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entity’s transaction and to maintain accountability for the related assets and liabilities. Note that,
the later part of this definition indicates that an accounting system has ‘accountability ‘or control
feature (KNAPP, 1996).
2 .4 BUSINESS EVENTS (ACCOUNTING TRANSACTIONS)
An Accounting (business) event is an economic occurrence that changes an enterprises assets,
liabilities or stockholders (owners) equity. A transaction is a particular kind of events that
involves transferring something of value between two entities
(EDMONDS/OLDS/NCMIR/TSAY, 2010). These can classify into three. These are;
1, Asset source transaction; a transaction that increase the total amount of assets and increase the
total amount of claims.
2, Asset exchange transaction; a transaction that decreases one asset and increases another assets.
The total amount of asset is unchanged.
3, Asset use transactions; a transaction that decreases the total amount of asset and claims.
2.5 ACCOUNTING CYCLE
In a well-designed accounting system, all accounting processes have undertaken in a form of a
cycle, known as the accounting cycle.
An accounting cycle is a complete sequence of accounting procedure, within an accounting
system of an enterprise that repeated in the same order during each accounting period (Fess
warren, 1984). It outlines the various accounting processes that undertaken by the accountant to
process transaction data through the book of accounts such as journals, cashbooks, ledgers, to
summarize and draw up financial statements and reports on the enterprises performance
continuously and at year-ends. An accounting cycle for the typical business organization consists
of the following key procedures;
➔ Record daily transaction data in source documents; this is a piece of paper or document that
initiates a transaction and reports its occurrence, example; Invoice, cash receipts etc.
➔ Analyses and record day by day and in chronological order the daily source document
transaction data in the journal.
➔ classify and post the journal transaction data to the ledger.
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➔ Balance and foot the ledger accounts to ascertain the balance in such accounts.
➔ prepare a trial balance to summarize and list balances in the ledger account to test their
arithmetical accuracy.
➔ Prepare a worksheet as a tool used to short out, update and organize trial balance information
needed at the end of the period (it may be optional).
➔ Correct, adjust and update the trial balance information in the worksheet to ensure that all the
transaction data and other accounting information that ought to be recorded in the accounts have
in-fact been recorded and that errors committed in in the processing of accounting information in
the source document, the journal ,the ledger and trial balance are corrected.
➔ prepare financial statements in the form of income statements, balance sheet, owner’s equity
statement and statement of cash flow. The two most widely used are income statement and
balance sheet. Income statement is a summary of revenue and expense of business entity for
specific period such as month or year. Balance sheet is a list of assets, liabilities and owners
equity at a specific date, usually at the close of the last day of the month or year.
2.6 SYSTEM OF BOOKKEEPING
2.6.1 Double entry bookkeeping
Double entry bookkeeping is the most efficient and effective method for recording financial
transaction in a way which allows the easy preparation of financial statements. In a double entry
bookkeeping system every transactions recorded twice. This reflects the dual nature of
transactions and provides an arithmetical check.
Advantages of double entry bookkeeping
● presents a complete picture of the initiation and occurrence of each transaction.
● It gives operation support for the accounting equation framework that is the total economic
resource of the business (its asset) must always be equal to the source of funds which were used
to acquire the resources.
● It makes easy to logically follow the movement of funds in the course of trading.
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● It gives a double check on each transaction recorded in the accounts as equal debit and credit
entries are made for every transaction.
● provides a reliable way for the basic requirements expected from an accounting record.
2.6.2 Single entry bookkeeping
Single entry system defined as any system, which is not exactly the double entry system. In other
words, single entry may consists of ;
1. Double entry in respect of certain transaction such as cash received from debtors, cash paid to
creditors etc.
2. Single entry in respect of certain transactions such as cash purchase, cash sales etc.
3. No entry in respect of certain transactions such as depreciation, bad debts etc.
Thus, a business said to be using single entry system, if it is not following completely the
principle of double entry bookkeeping system (MAHESHWARI, 2005).
Disadvantage of single entry system
●Arithmetical accuracy cannot be checked
●True profit cannot be known
●Financial position of the business cannot be judged
2.7 INVENTORY SYSTEM
There are two alternative approaches or systems as to the determination of inventory; Those are
perpetual and periodic inventory system. Under periodic inventory system, no attempt is made to
record the cost of inventories sold until at the end of the period.
On the other hand, perpetual inventory system uses accounting record that continuously discloses
inventory of each type of commodity at least once a year. The records are then compared with
actual quantities on hand, any difference then corrected.
2.7.1 Perpetual inventory system
It is also knows as automotive inventory system a methods of recording inventory balance after
every receipt and issue to facilitated regular checking and to closing down for stocktaking. The
basic objective of this system is to make available details about the quantity and value of stock of
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each item at all time it provides a rigid control over stock of materials as physical stock can
regularly be verified with the stock records kept in the stores and the cost office.
The evaluations of inventory and of the cost of good solids are critically importance to managers
and external user of financial statements due to the cases that inventory is the company largest
current asset and inventory is the company largest current assets and cost of goods sold is its
largest expense. These two accounts have significant effect on the financial statement sub totals
and ratios used in evaluating the solvency and profitability of business. (HORNGREN et al,
2002)
2.7.2 Periodic inventory system
In case of this system the quantity and value of inventory is found out only at the end of the
accounting period after having physical verifications of the unit in hand. The system does not
provide the information regarding the quantity and value of materials in hand on continuous
basis.
2.7.3 INVENTORY VALUATION METHOD
The price of many kind of merchandises are subject to frequent changes when identical lots of
merchandise are purchased at various duties during the year each lot may be acquired at different
cost price.
There are several assumptions of inventory valuation methods, each assumption made as to the
cost of units ending inventory leads to different methods of pricing inventory and to different
amounts in financial statement. Those four accepted assumptions are; Specific identification,
Average cost, first in first out, and last in first out methods (ROBERT, 2006).
First in first out; an inventory valuation (costing) method under which, per unit cost of the most
recently acquired goods are used to establish the cost basis of ending inventory.
Last in first out; an inventory valuation method under which, per unit cost of the earliest acquired
goods are used to establish the cost basis of ending inventory.
Specific identification method; an inventory costing method under which actual per unit costs are
used to establish the cost of basis of ending inventory.
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Weighted average method; an inventory costing method under which average per unit costs are
computed for goods available for sale during an accounting period, these average per unit costs
are then used to establish the cost basis of ending inventory ( KNAPP,2002).
2.8 ACCOUNTING SYSTEMS AND CONTROLS FOR SMALL ENTERPRISES
HUSSEIN (as cited in Mbroh and Attom, 2013:31) noted that, a good accounting system is not
only judged by how well records are kept but by how well it is able to meet the information need
of both internal and external decision makers. In his view, Clute (as cited in Mbroh and Attom,
2013:31) maintained that it is common for qualified accountants to do a good job of keeping
records up to date but they fail to provide information needed by decision makers. For a business
person, an accounting system should be capable of providing the following.
1. Interim statements, quarterly/six monthly that can provide information about the progress of
the business. Such a statement need not be detailed, but capable of addressing the special
needs of the business. Such documents can also be circulated, if necessary, among external
users such as lenders.
2. Efficiency, cash flow planning is very important for the small business. (As cited in Mbroh
and Attom, 2013:31) fuller tell that an annual cash flow forecast, reviewed periodically ,
could indicate over all financial requirements such a statement can be prepared only with
help of a well designed accounting system.
3. An accounting system, in addition to provide financial statement, must be capable of
generating other useful information in the form of reports. These includes, aged account
receivable, aged account payable, stock and bank balance etc.
4. In the case of manufacturing enterprises, cost records are usually useful in estimating costs
and determining prices. The accounting system for such enterprises must provide reliable
data forecast estimation.
2.8.1 INTERNAL CONTROL SYSTEM
Internal control system is designed by the organization for the purpose of;
1) Protecting its resources against waste and frauds.
2) Securing compliance with management policies.
3) Ensuring the accuracy and reliability of accounting and reporting data.
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The system of internal control includes all policies and procedures that enable an organization to
operate in accordance with management plans and policies (EDMOND’s/OLDS, 2010).
Internal control focus into two categories; These are Accounting control and administrative
controls. Accounting controls are measures that relate directly to the protection of assets or to the
reliability of accounting information. Administrative controls are policies designed to increase
operational efficiency. They have no direct brought up on reliability of accounting records.
However, sound administrative control may have vital role in successful operation of the
business (ROBERT, 1990).
2.8.1.1 Internal control concepts and issues
An accounting system is one component of an overall control system that business executives
use to monitor and control their organization. For small businesses, this control system is quite
informal; the principal method a sole proprietor may use to control his/her business is
involvement in the day to day operation of the firm. Employees have less opportunity to take
unfair advantage of their employer if he/she is working side by side with them.(KNAPP, 2002).
2.9 PRIOR STUDY ON SMALL ENTERPEISES
In Nigeria, there have been a large number of empirical studies conducted on small enterprise
such as ONAOLAPO and ADEGBITE,(2014).
These studies investigate the impact of accounting records on small enterprises. The finding
indicates that there is a strong positive relationship between accounting system and performance
of small-scale enterprises. Accounting system is essential for decision making which invariably
affects performance of small-scale enterprises.
Other studies were conducted in various countries to examine the accounting practice of small
scale enterprises and its effect on their performance and access to finance for example
(MICHAEL and CHIGOZI,2014) in Nigeria,(MBROH and BENEBO,2013) in
Ghana,(BRHANE,2014),(TAFA,2011) and ( FETENE, 2010) in Ethiopia. These studies found
that there is poor performance in small enterprises accounting practices. Those studies also found
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that most of the owners and managers of (operators) of SEs do not know the accounting skills
required to enhance the economic status of their business.
A study conducted in Zimbabwe on 100 SEs by MASEKLO and MANYANI (as cited in
Amoako, 2013:76) bring out that SEs do not keep complete records of accounts due to lack of
knowledge in accounting and the cost of engaging professional accountants. Consequently, the
use of accounting information to support measurements of financial performance by SEs is
ineffective. The study proposes that regulatory bodies must develop specific guidelines for SEs
accounting and organize training programs for entrepreneurs in small business.
As discussed by (OLATUNJI, 2013), small enterprises are gaining widespread acceptance as
viable drivers of economic growth. However, several of these enterprises demise without
fulfilling expectations due to poor management arising from week accounting structure. It also
showed that adoption of sound accounting system enhances performance of small enterprises.
In those studies, JOHN and BEN (2012) stated that there are fundamental problems militating
against the realization of small enterprises role to the benefit of economies especially in a
developing countries. They also stated that the absence of control system has contributed
significantly to their exposure to lapses, perceived misappropriation and reported losses with
small business segments being the worse affected. In addition, the other researcher KP ADACHI
(2012) argued that small enterprises poor performance often ascribed to external factors such as
burdensome character of legal framework, limited scope to penetrate the export market and
access to finance. However, internal factors such as marketing, operation, and in particular
accounting system may be equally responsible to such state of affairs. Moreover, other
researcher BRAHNE (2014) in Mekane Selam town stated that many of SEs are poor at
bookkeeping and did not prepare formal financial statements.
In this study the researcher tried to evaluate the attitudes of small enterprise managers towards
,business transaction, and its accounting treatment, internal control systems, inventory systems,
double entry bookkeeping and also tried to identify the reasons that hinder them from applying
accounting system.
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CHAPTER THREE
RESEARCH METHODS
3.1 RESEARCH DESIGN
This descriptive type of research followed both qualitative and quantitative data collection
approach. The researcher used open ended and close-ended questions for qualitative and
quantitative approaches respectively. Moreover, the researcher used questionnaires in order to
get detailed information about the attitude of enterprise managers towards the application of
elements of accounting system. Structured questionnaires (open ended and closed ended) have
been distributed to 46 SE owners/ managers.
3.2 PARTICIPANT OF THE STUD Y
The managers or owners of the enterprise were the human participant of the study.
3.3 SAMPLING TECHNIQUES
This research used stratified random sampling techniques because, the target population
(participant) of the study found in different or heterogeneous business activities such as
manufacturing, construction, urban agriculture, service and trade. So, to obtain the most
representative sample the researcher used stratified simple random sampling technique by
making strata based on their business activity, so that each business group is represented.
3.4 SAMPLE SIZE
From the total population of ‘82’ registered small enterprise(DMT MSEs development
agency,2007), the researcher used a sample size of ‘46’ enterprise managers or owners, based on
YAMANE (1996) sample size determination formula at 90% level of confidence and 0.1
precision levels.
n= N/ (1+N(e)2)
Where; n= sample size
N =total population
e= sampling error/precision level (1-level of Confidence)
22. 22
Among those sampled enterprises 23 were from manufacturing, 5 were from construction, 13
were from service, 2 were from urban agriculture and 3 were from trade based on their
proportion.
3.5 DATA TYPE AND SOURCE
The most important data used for this study was primary data that collected from managers or
owners of the enterprises. There is no secondary data, used to measure the attitudes.
3.6 DATA COLLECTION TECHNIQUES
Those data used for this study was collected by using primary data collection techniques that was
questionnaires (both open ended and close ended).
3.7 DATA PROCESSING, ANALYSIS AND INTERPRETATION
After the collection of available data, from small enterprise managers about their attitude towards
the application of major element of accounting system, the data was processed. In processing the
data, filled and completed questionnaires has been carefully checked to assure that the data is
accurate and to arrange to facilitate the tabulation systems. Since, this research type is simply
descriptive, the data have been analyzed by simple statistical tools (using tabulation) that is in the
form of tables, frequency and percentages and finally with statements.
23. 23
CHAPTER FOUR
DATA ANALYSIS AND INTERPRETATION
This data analysis and interpretation is made based on the questionnaires distributed to the small
enterprise owners or managers of Mekane Selam town. Total of ‘46’ questionnaires were
distributed to ‘46’ SE owners or managers of which, ‘43’ questionnaires (93.47% response rate)
were collected. The remaining ‘3’ questionnaires have not been collected due to the lack of
cooperation of the respondents and carelessly filling the questionnaires. Therefore this data
analysis and interpretation is made by ‘43’ respondents questionnaire.
Table1: Respondent’s background
Description Response Frequency percentage
Gender Male 34 79.07%
Female 9 20.93%
Educational level Certificate and below 30 69.76%
Diploma 9 20.93%
Degree 4 9.4%
Above Degree 0 0%
Work experience Below 1 year 5 11.62%
1-2 years 8 18.61%
3-5 years 20 46.51%
Above 5 years 10 23.26%
Position in the
enterprise
Only manager 7 16.27%
Owner and manager 36 83.73%
Education is critical in understanding the dynamics and challenges of business encounter. It is
expected that if an SE operators has a reasonable educational background, it will undoubtedly
enable to directly or indirectly implement the necessary elements of accounting system in his/her
business (Mbroh, 2013). The results in the above table indicates that about 69.78% (30) of the
SE owners/managers had attained primary, secondary or college education followed by those
attained diploma(20.93%). A few enterprise owners/managers (9.4%) attained degree. A gender
has also a great implication in this understanding because of its impact on the educational
24. 24
background. The results show that, about 79.07% (34) of the SE owners/managers are males and
20.93% (9) are females.
The going concern concept of accounting assumes that businesses are to exist in perpetuity. To
attain the going concern however, businesses are expected to survive all business trials in their
operations since there are often many challenges in the running of a business regardless of the
size and type of industry. Like individuals business events gain experience in various aspect of
their operations with time. In view of this it is expected that, the longer business unit operates,
the better positioned it is to account and implement controls in their business (MBROH, 2013).
Results in table-1 show that, majority (about 46.51%) of the respondent SE operators have been
in their business between 3 to 5 years followed by those in business over 5 years (about
23.26%). Few businesses (11.62%) had been established in the past year. The closeness of family
involvement is expected to influence the extent of accounting tasks. Where firms run by more
non family members (only managers) tend to keep formal accounts. In the opposite fashion,
firms run by more closely family members (owners) do not see the need to keep formal
accounting systems (K PADACHI, 2012). Table 1 shows that most of (about 83.73%) the SE
operators are owners and only 16.27 % (7) of the operators are managers (non family members).
This implies that most of the small enterprises are managed by owners (family members).
Table 2: preparation of financial statements
statement response frequency percentage
Do you prepare
financial
statement for your
enterprise?
Yes 16 37.21%
No 27 62.79%
total 43 100%
After taking some general information from the respondents, the main questioned was posed “Do
you prepare a crucial financial statement for your enterprise?” This question sought to categories
the respondents. Those respond ‘yes’ were continue to answer other questions whilst those who
answered ‘no’ were asked to give reasons why he/she prepare financial statement. Out of the
43, 37.21% (16) respondents answered “Yes”. The yes meant that per their Owen understanding
of the financial statements they are in place. The 27 (62.79%) were answered “no”.
25. 25
Table 3: Reasons for not preparing financial statements
Response frequency percentage
It is not important for small
business
5 18.52%
Lack of skilled labor 12 44.44%
It is not obligated by the
government
1 3.70%
It haven’t benefit for success
unlike production
9 33.34%
Total 27 100%
The above table shows that among the respondents who answered ‘no’ in table two, 44.44% says
lack of skilled labor is the main reason for not preparing financial statements. In addition to this
33.34% of the respondent owners/managers who did not prepare financial statement, thinks as it
haven’t benefit for success unlike production. This implies that there is lack of educated
manpower and lack of understanding the use of financial statements. Jointly the above two tables
implies that most of the respondents did not prepare financial statements since they have not
skilled labor and good understanding on the benefit of financial statements.
Table 4: attitude of owners/managers towards internal control system
statement response frequency percentage
Does your enterprise
have the designed
control system?
Yes 29 67.44%
No 14 32.56%
total 43 100%
Do you plan to use
internal control
system for your
business?
Yes 33 76.74%
No 10 23.26%
total 43 100%
Internal control in
small business enables
the control of cash,
Strongly agree 19 44.19%
agree 22 51.16%
neutral 0 0%
26. 26
purchase and different
disbursements.
disagree 2 4.65%
Strongly disagree 0 0%
total 43 100%
Regarding control procedures for small enterprise Sathyamoorthi (as cited in MBROH, 2013:31)
observed that it is important to have a system of control over all business activity as a well-
designed and properly implemented control system can ensure; protection of resources against
waste and fraud, accuracy and reliability in accounting data, and success in the evaluation of the
performance of the business. Any business regardless of its type and size should have a designed
internal control system to achieve its objective (plan). Table 4 of this paper indicates that 67.44%
of the respondents had understanding of internal control and are already in use in their business
and 32.56% of the respondents had not understanding of internal control. The second statement
also shows that 76.74% of the respondents have a plan to use internal control in their business,
and only 23.26% of them have not a plan to use it. Thirdly, Most of the respondents (about
44.14%) also strongly agree on the third statement and about 51.16% of the respondents agree on
that statement. This implies that most of small enterprise owners/managers have a positive
(good) attitude towards internal control.
Table 5: Business transaction and its accounting treatment
Statement response frequency percentage
Do you record all
transactions timely?
Yes 9 20.93%
NO 15 34.88%
mezzanine 19 41.19%
total 43 100%
If your answer is
mezzanine what type of
business transaction is
recorded
Asset change 2 10.53%
Asset use 9 47.39%
Asset source 8 42.10%
total 19 100%
Recording all business
events (transaction) of
small business is
Strongly disagree 13 30.24%
Disagree 11 25.26%
Neutral 3 6.98%
27. 27
tedious and less fruit
full.
Agree 14 32.56%
Strongly agree 2 4.66%
total 43 100%
Okoli (2011) in his study argues that in order to enhance the profitability of small enterprises and
their continuity, there is a need for adequate recording all business transaction, which will help
the operators to keep track of the performance of these enterprises. Bulter (2009) also show that
without accurate and complete records of business transactions, the business doomed to fail at its
on set. Table 5 of this study in the above shows that only 20.93% of the respondents record all
business transactions on a timely basis and 34.88% of them do not record all business
transactions. 41.19% of the respondents are mezzanine in the statement. About 47.39% of the
respondents, who answer mezzanine, records asset use transactions followed by asset source
transactions. Moreover, most of the respondents (about 55.5%) disagree on the third statement.
This implies that, even though they do not apply, most of the owners/managers have a positive
tendency towards business transactions.
Table 6: system of recording business transaction
Statement Response Frequency Percentage
Through what system
you record business
events?
Double entry 7 6.27%
Single entry 2 4.65%
Neutral 34 79.08%
total 43 100%
If your answer is
neutral what system
do you think
important for your
enterprise?
Double entry 13 38.24%
Single entry 21 61.76%
I don’t know 0 0%
total 34 100%
OGUNLADE and BAUMBACK (1983) and OSUALAL (1993) noted that most of small scale
enterprises make use of single entry system of accounting. The reason behind the use of single
entry system of accounting is probably due to its simplicity and low level of accounting
education of operators. In table 6, the results show that most of the respondents (about 61.76%)
28. 28
think as single entry system is important for their enterprise. The results partly agreed with the
above arguers. It implies that most of small owners/managers have a tendency to apply single
entry system and have not positive attitude towards double entry system of accounting
(bookkeeping).
Table 7: Attitude towards inventory system
statements Strongly
agree
Agree Neutral Disagree Strongly
disagree
total
Inventory system is
important for one
enterprise.
22 10 6 5 0 43
51.16% 23.26% 13.95% 11.63% 0% 100%
Adequate inventory
system is important
for a complete
accounting system
and performance
planning
17 17 6 1 2 43
39.53% 39.53% 13.95% 2.33% 4.65% 100%
a
Statement Response Frequency Percentage
If your answer is
agree or strongly
agree, what system
you think important?
Perpetual 27 81.57%
Periodic 7 18.43%
total 34 100%
What method of
inventory valuation
you think important?
FIFO 10 23.26%
LIFO 2 4.63%
Average 20 46.52%
Specific identification 0 0%
Neither of them 11 25.59%
total 43 100%
B Source: questionnaire, 2015
29. 29
In table 7a, the results show that, most of the respondents, 51.16% strongly agree and 23.26%
agree on the first statement. 13.95% 0f the respondents were neutral and 11.63% disagree on that
statement. In the second statement 34 respondents (about 79.06%) agreed, 6 respondents
(13.92%) are neutral, 1(2.33%) disagreed and 2 (4.66%) are strongly disagreed. This implies that
most (more than half) of the enterprise owners/managers have a positive tendency towards
inventory system. To strengthen this idea, in table 7b, results show that about 81.57% of the
respondents believe as perpetual inventory system is important for their enterprise. In the second
statement 20 respondents (about 46.52%) believed that average inventory valuation method is
important for their business.
Table 8: attitude towards Accounting
Statement Strongly
agree
agree neutral disagree Strongly
disagree
total
Accounting system is
vital to small business
18 20 2 3 0 43
41.86% 46.51% 4.66% 6.98% 0% 100%
All business ,including
small business require
accounting
13 10 4 9 7 43
30.24% 23.26% 9.3% 20.93% 16.27% 100%
I would appreciate if
given opportunity to learn
about accounting.
22 20 0 1 0 43
51.16% 46.51% 0% 2.33% 0% 100%
Penen and Grant noted that decision making processes in small scale enterprises are more
sophisticated than anticipated, but they lacked effective accounting information and control
systems to support their decision. Furthermore, International Federation of Accountants also
suggest that small firms are aware the importance of accounting system (as cited in Amoako,
2013:75). The result of table 8 in the above indicates that most of the respondents (about
46.51%) agreed on the first statement followed by 41.86% strongly agree. On the second and
third statements also most of the respondents (30.24% and 51.16% respectively) strongly agreed
followed by 23.26% and 46.51% agree respectively. This result supports the argument of
30. 30
International Federation of Accountants. This implies that most of small enterprise
owners/managers have a positive tendency towards the important of accounting system.
Table 9: owners/managers filling by not applying accounting system
Statement Response Frequency Percentage
Do you think that
your business can
save some money by
not applying
accounting system
Yes 25 58.14%
No 18 41.86%
total 43 100%
In a related study John and Ben (2013) and International federation of accountants (as cited in
Amoako, 2013:75) found that small firms are aware the important of accounting system. In spite
of this aware most SEOs lack basic working knowledge in accounting to keen the use of standard
accounting system to run the day-to-day activity of their enterprise. The above table result shows
that 58.14% of the respondents think as they can save some money by not applying accounting
system. Only 18 (41.86%) respondents said no on the statement. This implies that most of the
small enterprise owners/managers believed, as the application of accounting system is costly in
addition to the lack of skilled labor they face.
When we come to the analysis of the data that obtained from open ended questions they does not
blamed their filer to hold a record towards tax. In opposite fashion, as most of the respondents’
response they believe as the tax system become fair if they have financial statement. Moreover
they also responded as they will not embezzle by tax assessors. Most of them also responded for
the question “why government advises you as you have accounting system”? As the government
makes it for their own purpose but some of them (small in amount) believes as the government
do it for its own tax collection system. From this it is possible to conclude as most of the
respondents know the advantage of accounting system and as they do not attach to the tax
increasment problem. For the other open end question, what is the importance of accounting
system? , most of them responded as it has the following importance:
31. 31
The first advantage that they give is to issue financial statements that used for outside parties
especially for lenders. With regard to this they also explain as they cannot gat loan if they have
not some tangible property without exception.
With regard to the last question most of the respondents responds as they have not accurate
knowledge to decide about the elements of accounting system which must be implemented by
their business. In support of this most of them said we have not any knowledge for this, we only
apply what the government said to us and what our experienced friends advises us. From this the
researcher concludes as they have positive attitude towards the application of accounting system.
32. 32
CHAPTER- FIVE
SUMMARE, CONCLUSION AND RECOMMENDATION
5.1. SUMMARY OF THE FINDING
Majority of the small enterprise owners/managers (about46.51%) had been in business
between 3 to 5 years. 11.66% had been began in the past year. A majority of (69.78%)
had up to certificate and below certificate education. 9.4% had degree level education.
62.79% of the respondents do not prepared financial statements for their enterprise.
Among those who did not prepare financial statement 44.44% blamed to lack of skilled
labor. 33.34% thinks as it have not benefit for success unlike production. 3.7% reasoned
as it is not obli gated by the government.
Among the respondents 67.44%s have a designed internal control system that they think
important for their business. 76.74% plans to use internal control system in their
enterprise. 51.16% agreed on the role of internal control in small enterprise. 44.19%
strongly agreed and 4.65% disagreed.
Most of SEO/MS (34.88%) does not record business transaction on a timely basis.
47.39% of them record only asset use transaction and 42.10% record asset source
transactions.32.56% agreed on the tediousness and fruitless of recording all business
transactions of small enterprises. 30.24% and 25.26% of the respondents strongly
disagree and agree on the statement respectively.
61.76% of the respondents think as single entry system of bookkeeping is important for
their enterprise.
From the total respondents 51.16% strongly agree on the important of inventory system
for one enterprise. 81.57% thinks as perpetual inventory system is important for their
enterprise and 46.52% of them inclined to use average inventory valuation method.
Among the respondents 46.51% agreed on the vital of accounting system to small
business. 30.24% strongly agreed on the importance of accounting for all business and
51.16% are willing to learn more about accounting if given opportunity. 2.33% disagreed.
58.14% of the respondents think as their business can save money by not applying
accounting system.
33. 33
5.2. CONCLUSION
The study revealed that SMEOs do not prepare crucial financial statements for their
enterprise because of the lack of accounting knowledge (skilled labor) and due to lack of
understanding the ultimate importance of financial statements. As result there is inefficient
use of accounting information to support the financial performance measurement by small
enterprises.
More over based on the finding the researcher concludes that, Even though they do not
prepare financial statements and do not record business transactions timely because of lack of
skill (skilled labor) in accounting and worry on the cost of hiring accountants, they have the
positive attitude to apply elements of accounting system when the above constraints solved.
This study ignores the idea proposed in K padachi (2012:3).
The study further revealed that the owners/managers of SEs were highly willing to learn
more about how to keep accurate records of their business transactions. The finding of the
study showed that the owners/managers of SEs had a positive attitude towards internal
control, inventory system and business transaction. In addition to this, this study concludes
that except deferent restriction small enterprise managers believe as accounting system is
important for one enterprise including theirs.
Additionally, the finding showed that SEOs, because of the simplicity of single entry
bookkeeping, are more inclined to adopt single entry system of bookkeeping.
Finally, it revealed that the failure of not applying accounting system was highly blamed by
small enterprise owners/managers to lack of skilled labor and cost of hiring professional
accountants and in some extent to the size of the enterprises.
5.3. RECOMMENDATION
After a detailed investigations made on the attitude of small enterprise owners/managers towards
the application of major elements of accounting system the researcher would like to forward the
following recommendation.
It is recommended that the ministry responsible for SEs development should initiate, in more
strengthen way, record keeping training program for entrepreneurs running small business.
34. 34
Bookkeeping in SEs should be made mandatory to change their tendency in to practice and to
improve their accounting practice to enhance financial and economic decision making for
business growth.
Since there is international acceptance that SEs requires simplified financial reporting
standard fitting their reduced size and narrow stockholders base, the government needs to
adopt simplified accounting standard sets for SEs.
Mekdela Amba/Mekane Selam university, specially accounting department like that of law
school, should establish a free community services in bookkeeping support institute to
facilitate small enterprise owners to apply accounting system in their enterprise.
35. 35
REFERANCES
Admas University College (2014) principle of accounting, teaching material, unpublished.
Amoako .G.K (2013) accounting practice of SMEs; a case study of Kumesi Metropolies in
GANA, International journal of business and management,vol.8,No.24, published by Canadian
center of science and education.
Brhane Tadesse (2014), access to finance for Micro and Small enterprise in Mekane Selam town
Ethiopia, Global journal of current research, vol.2, No.2; pp.36-46.
Donald E.kieso and jerry j.Weygandt (1998), intermediate accounting, 9th edition.
Edmonds/olds/mcnair/tsay(2010), survey of accounting,2nd edition.
Fess warren (1984), principle of accounting, 16th edition.
Fetene zeru (2010), access to finance and its challenge for small enterprises: in case of Addis
Abeba city, unpublished
Jane, Williams et al (2006), Accounting for decision making and control.
Mbroh J.K and Attom B.E (2013) Accounting and control system practiced by small and micro
enterprise owners within the cape coast metropolital area of Ghana, Asian journal of business
and management sciences, vol.1 No.1; pp. 28-47.
Okoli B.E (2011) Evaluation of the accounting system used by small scale enterprise in Nigeria:
the case of Enugu- south east Nigeria, Asian journal of business management, vol.3, No.4;
pp.235-240.
Olatunji T.E (2013) The impact of accounting system on the performance of small and medium
scale enterprises in Nigeria: a survey of SMEs in oyo state- Nigeria, International journal of
business and management invention, vol.2;pp 13-17.
Padachji k (2013) factors affecting the adoption of Formal Accounting system by SMEs,
Business and Economics journal, vol. 2012, BEJ 67.
Robert F, meigs and Walter B (1990), accounting the base for business decision, 8thEdition.
Robert, Anthony and James Reece (2006), accounting principle, 6th Edition.
Tafa (2011) Accounting practice of small and medium sized enterprises and its effect on access
to finance in addise abebe; unpublished.
Zemenu A and Mohamed M (2014) determinant of growth of micro and small enterprises in
Ethiopia: a case of Mse in mekelle city, tigry, international journal of Advance research in
computer since and studies, vol2; pp149- 157.
36. 36
Mekane Selam town administration micro and small enterprises agency total summary data slip,
code 004.
website
http:/ www.gov.et/ micro and small enterprise development agency.
http:/ www.memoireonline.com/accounting system in small enterprise.
37. 37
APPENDIX
BLUE MARK COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF ACCOUNTING AND FINANCE
Deer respondent,
I am the student of Blue Mark college of Business and Economics, department of Accounting
and Finance. The purpose of this study is to evaluate the attitude of small enterprise managers
towards the application of major element of accounting system, so this study needs to gather
information to achieve its objective. So your response is very crucial and hence you are kindly
requested to respond genuinely. The researcher wants to assure you that it will be used only for
academic purpose and to be kept confidential. Please do not write your name anywhere on the
questionnaire
. I appreciate your cooperation in this study
. If you have any question please call, 0928579011 or 0948707012
Thanks in advance!!!
Respondent background
1, Gender
Male female
2, work experience
<1 year 1-2 Years
3 -5 Years >5 years
3, level of education
Below certificate and certificate degree
Master other………………………………………………….
4, position in your enterprise
Only manager
Managers and owners
5, Do you prepare a crucial financial statement for your enterprise?
Yes no
6, If your answer for question number 6 is no why?
It is not important for small business
38. 38
Lack of skilled labor others----------------
It is not obligated by government
It have not benefit for success unlike production
7, Does your enterprise have the designed internal control system?
Yes No
8, If your answer for question number 8 is no why?
It is not as much important
It is costly to apple
The employees of our business is family members
The size of the business is small
Others specify-------------------------------------------------
9, DO you plan to use internal control system for your business?
Yes No
10, Does your enterprise record all transactions timely?
Yes No
Mezzanine
11, If your answer is mezzanine, what type of business transaction (business event) is (shall)
Recorded?
Asset source Asset use
Asset exchange
12, If your answer for question number 11 is yes through what system your enterprise record
business events?
Double entry neutral
Single entry neutral
13, If your answer for question No’12’ is neutral, what system do you think important for your
enterprise?
Double entry others specify ---------------------------------
Single entry
14, inventory system is important for one enterprise.
Strongly agree Neutral strongly disagree
Agree disagree
39. 39
15, If your answer for question No ‘14 is agree or strongly agree what system is you think
important?
Perpetual
Periodic
16,What method of inventory valuation you are applying or needs to apply?
FIFO LIFO
AVERGE
Specific identification neither of them
17, accounting system is vital to my business.
Strongly agree neutral
Agree
Disagree
Strongly disagree
18, all business, including, small business require accounting
Strongly agree
Agree
Neutral
Disagree
Strongly disagree
19, recording all business events (transactions) of small business is tedious and less fruitful.
Strongly agree
Agree neutral
Disagree
Strongly disagree
20, I would appreciate if given opportunity to learn about accounting
Strongly agree Disagree
Agree Strongly disagree
Neutral
21, do you think that your business can save some money by not applying accounting system.
Yes No
40. 40
22, adequate inventory system is important for complete accounting system and for performance
planning
Strongly agree neutral
Agree
Disagree strongly disagree
23, Internal control in small business enables the control of cash, purchase and different
disbursement
Strongly agree Disagree
Agree Strongly disagree
Neutral
24, what do you think about the importance of accounting?----------------------------------------------
---------------------------------------------------------------------------------------------------------------------
--------------------------------------
25, why government advises as you shall have accounting system? ------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------
26, do you believe that financial statement increases the amount of tax--------------------------------
----------------------------------------
27, What is your overall opinion about the element of accounting system that shall be applied by
small enterprises? ----------------------------------------------------------------------------------------------
---------------------------------------------------
