THE EFFECT OF POOR ACCOUNTING RECORDS IN SMALL AND MEDIUM PROFIT MAKING ORGANIZATION A CASE STUDY OF ASA VENTURES LTD, OZORO, ISOKO NORTH L.G.A
Discussion of the
project work is necessary as it serves as a summary of the detailed work, which
introduced what the leader will find in the followings chapter one which serves
as an introduction chapter attempt to give a brief definition of accounting and
also explain the importance of the terms used. Chapter two deals on literature
review, nature and effect of poor accounting records on small and medium scale
business.Chapter three explain the method of data collection. Chapter four
interpreted and analyzed the various data collected, while the writer concluded
the study of the project in chapter five with summary of findings, conclusion
and recommendation that would in one way or the other rectify the
problem/effect of poor accounting records in profit making organization.
of the Study
accounting record is very vital for the survival of business in any making
organization as it widely recognized as a basic component use in measuring and
recording of financial transaction so as to pass informed decisions. Debenture
holders and shareholder are informed of their financial status in their companies
through the accounting record kept.
is the process f presenting information derived from book-keeping as accounting
for the use of management and others as opined by some learned authors as
oriented organization needs the accounting information for proper management
and control. It is now very necessary to have proper accounting records in
every day’s activities which can be well interpreted at any point in line by
the users. Recording business transactions involves some documentation of fact
for reference, it is important to maintain accurate accounting record for the
To meet government requirement of audited financial
statement for the purpose of tax and share subscription.
To enable the ascertainment of profit and loss in an
It is now very obvious that accounting is of noticeable
importance to every unit of our society. Accounting records involves the
Source document: Receipts, invoice, credit notes, cheques,
payment voucher etc
Books of original entry: Sales journal, purchase journal,
return inward journal, cash book, journal proper and ledger.
Final accounting: Manufacturing, trading, profit and loss
account and the balance sheet.
They are prepared to know the transaction and the result of
such for a particular period.
1.2 Statement of
The purpose of this piece of work is to find out the effect
of poor accounting records in a profit making organization. In a situation
where accounting records are poorly kept, problem emerges and such problems
Exposure of organization to theft
Decline in the size of organization
Poor management and control
Fraudulent act among employees
1.3 Purpose of
The major of this study is to examine and be able to
identify the possible effect that a poor accounting record will have in a
profit making organization.
The study will specifically;
Find out the effect of poor accounting records
Identify the causes of poor accounting records
Make the researcher judge and identify the level of effects
on the business.
1.4 Research questions
The research questions will be tailored along line of
questions that will enable the researcher gather relevant information about the
What is the effect of poor accounting records in an
Where are these effect pronounced in an organization?
Is there any alternative method of overcoming the effect?
Can a better method be adopted to upgrade the accounting
of the Study
The significance of this research cannot be over emphasized
as it will touch all aspect of accounting management function and the process
for proper financial records.
Internal recording to managers for us in making special
decision and in formulation of plans.
Internal reporting for managers use in controlling current
External operation to shareholders, government and outside
1.6 Scope of
This piece of work is directed towards the evaluation and
appraisal of the effect of poor accounting records in a profit making
organization in which certain factors made it impossible for a full average of
the study of some of such factors which involve but not limited to the
Inadequate source of information in getting the relevant
text and literature for adequate reference was not so easy. More so, the
project is limited to the small and medium scale industries where the effect of
poor accounting records will be studied in details.
course of this research work some words have been use and needed definition for
Book-keeping: Is the process of recording data relating to
accounting transaction in the accounting books, and the transactions are being
recorded in an orderly manner.
Balance sheet: It refers to the summary of the state of
affairs of the assets, liabilities reserves, profit and capital as shown by the
book of account at a particular date.
Ledger: Is an account which contains summarized and a
permanent record of all business transactions.
Cash book: Is a unique book that serves as a book of
original and as well as section of ledger in which are recorded all daily cash
receipts and cash payment.
Profit and loss account: Is an account prepared to determine
the second profit which is called net profit or net loss.
Sales day book: Is the book where all goods sold on credit
Purchase day book: Is the book where all goods bought on
credit are recorded.
Trading account: Is an account where the sales revenue is
compared with loss of sales to arrive at gross profit or loss.
Depreciation account: Is the permanent and continues
decrease in the quality and value of a fixed assets.