ABSTRACT
The important of accounting record in profit making
organization was undertaken in order to ascertain the impact of bookkeeping on
profit performance on small scale business in Nigeria. It is noted that proper accounting records is
essential for the success of any organization.
Some companies perform well because of good accounting management,
others barely survive because of in-efficiency and misdirected operations. Proper accounting records enables the sole
traders, partnership or any business organization to know how much they uses ,
how much they make and what their present financial position at any given
period. Hence, accounting records is
said to be the act of recording peculiarity or business transaction in a
regular and systematic manner.
CHAPTER ONE
INTRODUCTION
1.1 Background
of the Study
In turbulent time, an organisation has to be managed
properly in order to withstand the changes in the environment and to protect
itself from unexpected events such as business failure and eventual winding
up. In every profit seeking
organisation, financial management is very necessary for proper accounting
record and investment decision.
Therefore, the success or failure of the enterprise solely depends on
the financial management. Most
enterprises have had some outstanding success while others have been dismal
failures.
An organization in this context is more than a group. It is something more than a casual human
assemblage such as a social part or a class of accounting students.
According to Drucker, an organization is defined as a
concrete social process with more definable boundaries through which
interaction must take place and by striving towards goals requiring mutual
effort”. Organisation can also be
defined as a system of coordinate activities by two or more participant in
order to actualize common goals.
The need for account record in our economy becomes obvious
in Nigeria during the Nigeria enterprises promotion decree of 2003, when the
problem of inadequate manpower to replace the foreigners became evident. This therefore called for training of more
accountants from our universities and other higher institutions, such as
polytechnic and colleges of education.
Needs for organisation to keep financial accounting record is to know
how much profit they make from trade and what their financial position is at a
giving time.
Hence, Wanogho (2006), define accounting as a process of
recording classifying, selecting, measuring, interpreting and communicating all
financial data of an organisation to enable users make assessment and decision.
1.2 Statement of
the Problem
The importance of accounting in profit making organisation
is of a significant nature. But some
business organisation has been faced with some problems which resulted to their
winding up. Some of these problems are
viz:
Lack of systematic records for financial transaction.
No record for the value of asset and liabilities record.
Lack of recording and assessment of profit or loss made at
given time.
Lack of recording the value of expenses.
No provision for financial record used for comparative
purpose.
Lack of position and improvement in the efficient running of
a business over a period.
Lack of distribution of funds (i.e. loan and other
resources).
1.3 Objectives
of the Study
This research will help many business concerns on how to run
a profit making them understand the importance of accounting in the following
ways:
According enables business organisation to keep their record so that the business man will
know the profit made or losses incurred in a given period.
Help to know the financial position of a business at any
determined period.
To know how much tax is to pay after the declaration of
profit.
Reduce cases of fraud associated with improper record
keeping by management.
1.4 Research
Questions
The questions asked in this study are viz.
Are the recording of financial transaction important in
profit making organisation?
Will the lack of recording of value asset and liabilities
any effect in profit making organisation?
Are the assessment of profit or loss important in profit
making organisation?
Are the lacks of recording of the values of expenses any
affect on profit making organisation?
Are the record of provision for depreciation important in
profit making organisation.
1.5 Significance
of the Study
The significance of this study is to highlight the visible
importance of accounting record in profit making organisation. This research will be of a great aid to
government and private organisation (both large and small scale business) in
enlightening them on the importance of accounting and recording the day to day
activities or informed in profit making organisation.
1.6 Scope of
study
The research work of this nature is a lengthy one and the
research, though intend to conduct an extensive survey, nevertheless the study
shall be restricted under Esco Supermarket, Warri, Delta State.
Moreover, in carrying out the research, certain category of
people which include accountants, managers, and sales representative in these
selected few are best suited for this research.
1.7 Limitation
of the Study
The limitations encounter in the course of this study
includes:
Time constraint
Resources of the researcher disposal
Availability of relevant data of information
Existence of other limiting factors no readily envisaged.
1.8 Definition
of Terms
Accounting: This is
the process of recording classifying, selecting, measuring, interpreting and
communicating financial data of an organisation to enable users make assessment
and decision. T is a disciple which
comprises a set theories and concept for
processing financial data into information.
Book keeping: This is the actual systematic recording of
daily transaction in the appropriate book called book keeping.
Profit: Profit is
reward which becomes due to the owners of a business as a result of a
successful period of trading.
Accounting Equation: This is a method of calculating for
asset and liabilities of a business. The
fundamental formula is
Asset – Liability = Capital
Asset: Asset can be defined as the properties of a business
e.g van, equipment, inventory, cash etc.
Capital: This is the
proprietor’s fund or net worth of business that is owner’s equity.
Liabilities: This is
an amount owned by the enterprise to outsiders or customers.
Double Entry System of Accounting: It is a principle which stated that all
transactions have two effect, the receiver of benefit and the giver of benefit.
Accountant: An accountant is a person who has undergone a
formal or professional training in the process of accounting and also who
belongs to at least one of the recognized professional body of accountants of
Nigeria either the ICAN or ANAN.
Balance Sheet:
Balance sheet is a statement that show the presentation of the summary
of assets and liabilities in a well arranged form so that financial position
may be clearly ascertained.
Organisation:
Organisation can be defined as a system or coordinate activities by two
or more participants in order to achieve common goal.