THE EFFECT OF ACCOUNTING TECHNIQUES ON SMALL BUSINESS PERFORMANCES. (CASE STUDY OF SELECTED SMALL SCALE BUSINESS OPERATOR IN AMUWO ODOFIN LOCAL GOVERNMENT AREA, LAGOS STATE)

ABSTRACT

mso-hansi-theme-font:major-latin">Most of the existing research literature on

accounting in Nigeria SMEs tends to be more biased toward the use of financial

accounting techniques and methods by small business onwers, information

technology adoption as well as research in credit accessibility for SMEs, more

so only remote exists in regard of the adoption of modern accounting techniques

by SMEs in Nigeria.

mso-hansi-theme-font:major-latin">Many small business owners are daunted by the

mere idea of accounting techniques and bookkeeping. But in reality, both are

pretty simple. Keep in mind that bookkeeping and accounting techniques shares

two basic goals: to keep track of income and expenses, which improves chances

of making a profit, and to collect the financial information necessary for

filing various tax returns. There is no requirement that records be kept in any

particular way. As long as records accurately reflect the business’s income and

expenses, there is a requirement, however, that some businesses use a certain

techniques of crediting their accounts: the cash method or accrual method.

Depending on the size of the business and amount of sales, one can create own

ledgers and reports, or rely on accounting (Williams et al 1999). Elements of

financial position, including property, money received, or money spent, are

assigned to one of the primary groups, that is, assets, liabilities, and

equity. Within these primary groups each distinctive asset, liability, income

and expense is represented by respective “account”. An account is simply a

record of financial inflows and outflows in relation to the respective asset,

liability, income or expense. Income and expense accounts are considered

temporary accounts, since they represent only the inflows and outflows absorbed

in the financial-position elements on completion of the time period.

mso-hansi-theme-font:major-latin;mso-bidi-font-family:Times-Roman">According to

Goltz (2011), poor accounting techniques are one of the top ten reasons why

small-scale businesses fail. i.e. you cannot be in control of a business if you

do not know what is going on. With bad numbers, or no numbers, a firm’s is

flying blind, and it happens all of the time, this
mso-hansi-theme-font:major-latin;mso-bidi-font-family:"Arial Narrow"">affect

the operations and performance of SMEs in Nigeria especially this issue of lack

of adoption of good accounting techniques/method which is a worm eating deeply

and the large chunk of revenues generated by these SMEs for their growth and

survival. These have led to increase in record of dearth of Small and Medium

Scale Enterprise (SMEs).

mso-ascii-theme-font:major-latin;mso-hansi-theme-font:major-latin;color:windowtext">The

major objective
TimesNewRoman;mso-hansi-theme-font:major-latin;mso-bidi-font-family:TimesNewRoman;

color:windowtext">aim
major-latin;color:windowtext">is to examine the effect of accounting techniques

on small scale business performance and to also evaluate the knowledge levels

of accounting techniques among small business owners and how this affects

enterprise performances.

mso-hansi-theme-font:major-latin">This study will be of immense help to the
mso-hansi-theme-font:major-latin;mso-bidi-font-family:"Arial Narrow"">Small and

Medium Scale Enterprises Development Agency of Nigeria (SMEDAN)
mso-hansi-theme-font:major-latin">, it will also also assist the Agency in

determining or formulating their future plans and also
mso-hansi-theme-font:major-latin;mso-bidi-font-family:Calibri">be a source of

knowledge to small-scale enterprises (SSE) on how to maintain proper accounting

records and standards.

mso-hansi-theme-font:major-latin">The research work has focused on SMEs because

these firms in Nigeria account for more than 90% of the country’s business

(Central Companies Directory, 2010). However,
mso-bidi-font-family:Calibri">the research was limited to small and medium

scale enterprises operator in osun metropolis due the schedule of the

researcher.
major-latin;mso-hansi-theme-font:major-latin;mso-bidi-font-family:Swiss721BT-Light">