The Need For Accounting Education In Small Scale Industries

THE NEED FOR ACCOUNTING EDUCATION IN SMALL SCALE INDUSTRIES

It is not generally agreed that a small scale business  it and could be sand here too that there are as many definition of small scale industries as there are express in the subject, those not withstanding the various definition given which seem to be on the basis of such parameters as.

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  1. The numbers of owners
  2. The nature of business
  3. The volume of sales
  4. The asset base and
  5. The numbers of employment.

The Nigeria industrial policy is defined  scale of industries as those with total investment of between N10,000 and 2 million exclusion of land but indicating work capital (1 bad) another authoritative definition is given by the central bank of Nigeria it is credit and monetary guide line No 25 for the 1991 fiscal year and it’s small scale industry is defines as those enterprises whose capital investment do not exceed 5 million including land and working capitals or whose turnover are not more then N25 million annual (1.bd) the company and accrued.    Matter decree No 201 1996 section turnover is not more then 2 million or whose not asset volume is not more than N 1 million.

The small-scale industries division of the Federal ministry of industries in 1999 defined small-scale industries as enterprise having investment capital (in land, building) machine and  equipment working capital (at up to N 60,000 and employment not more then 50 persons.

Nigeria bank of commerce and industries (NBC) in 1981/82 defined small scale enterprises as those investing not more then N 500,00 excluding the cost of land but including working capital. This definition was given to serve the NBCL on the purpose of involving loan scheme of small scale business.

So with this in mind, this works will use a definition that is devoid of above asked influences and which stint the present economic situation small-scale  enterprises are also proprietorship because whose the size not allow for elaborated administration structure not employment more there so employees, having capital is vestment  not more then N 3 million including, land, working capital and having a small share of the market they are sufficiently large to have access to the capital market for public issue of securities.

This definition including subsidence off large companies since they are essentially branch of large form with access to capital are perhaps technical assistance from the parent company who will and then in period of cusses distress unless the parent company deliberately decided to let them go.

 

2.2     ACCOUNTING PROBLEMS IS SMALL SCALE INDUSTIES:         In small-scale industries-small scales industries are traced WAH  a lot of accounting problems many authors have study those problems and expressed their opinion about them notable among them include.

Tome et al (1986) gard that most small business failed not be cause of the poor state of economy that is prevailing, but mainly because of their inadequate attention to those needs for accounting knowledge in their organization.

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He further maintains that inadequate planning and record keeping his been a planning problem of those small scale enterprises every business organization in cause  a series  of cast from time  to time, and it is very important that every single cost incurred on the course of carrying out business activities should be recorded.

Osisiona (1986) in his paper presentation said that the accounting training. And professional discipline contributed to the development of a high and assistance economic condition by helping from waste and achieve greater efficiency what remains baffling however, is that the small business employ inefficient accountant who finds it very difficult to do the accounting working in this organization it creates inefficient in management.

Dick (1964) State that in most small-scale business, the  accounting problems in countered depends by very must on the inability to the management is establishing account department for accurate record keeping, and efficient management.

Jems (1964) States that most small scale industrial fail to recognizes the important of accounting department in a firm or an organization, they see the act of keeping records and preparation of  financial statement as one sob anclend up without achieving the form objections.

NWOKOYE (1988), stressed that most accountant are accountant by profession but not in practice, when the small scale industrialist  employ them they find it difficult to them own works efficiently and thus created problems for industries.

Mags (1977), sarel that the exist greats a great deferent between the understanding of accounting procedure and the ability to use these procedures this accounts for in ability of some lineds professional to small scale industries to perform in accordance with expectation.

 

2.3     IMPORTANCE OF ACCOUNTING TO INDUSTRIES

Mergges (1977), state that accounting is the process by which the profitability and of a company can be measured and it also provides for information needed as a basic for making business decision that will enable management to guide  the company on a profitable and solvent course the further stated the accounting help the company to known whether they are solvents in solvent also that managing a business is a matter of deciding what should be done seeing it that the means are available and getting people employed in the business to do it.

EZEAKU et al (1986) seeing accounting as a procedure out of any economic acting and the measurement  of an increate or decrease in value arising from there, the degree of elaboration to be made depends on the note and amount of financial information required by management the order to be useful to the users accounting  information must be relevant accurate. He further gave the important of accounting as follows:

  1. It help in recording various transaction and exchanges that have taken

place in the course of business activities.

  1. It help in measuring and reporting on the financial effects of business

activities.

  1. It also help in the measurement of profit and preparation of a statement

that  report the amount of the profits made in the course of economic

activities.

  1. It records the origin of the resources under managerial control and

tracing how the resources have been lese and investment that have been

made.

Ossiema (1986), said that accounting information determines whether organization are receiving of fair share of the company gains and to  bargeans to pay what course, it help in making for research decision that effect the running of a company activities  accounting information is of what important to management, the information could be used by management of gange the results of theirs operation.

In his opinions government agenies like internal revenue are very much interested in the accounting information because it enables them to assess the amount of tax to demand form the country Radio (1970) stressed that every will run business must be able to analysis it past operation and use information gain from IES expence as a guide for the future the owners of a small business rely on financial statement and report supplied  by an accountant or controls of the corperation financial report present a picture of the operation of the business or are definite period of one year six month they provides a history of the firm operations which can be used as a guide to establish future polices. He further said that  there are two basic  financial report, the balances sheet and the statement of profit and loss these two reports are the  key of business planning the tell the management of the firm how much the company owns report the management  receives a picture of  part operation and the condition of the business at the presents time

Reu (1970), further state that the company should issued a receipt for all payment received in cash by many order, in orders to ensure, the safe handing and accurate recording of money received al the receipt of the business pas through can accountant or account clerk.

In his opinion amount owned to the company by customers are called accounts  recewesible when a customers make his accounts receipt of section of the  accounting department, from the record the amount f the individual cheque or cash payment of the various customer account are made known.

Merggs (1984), State that accounting is an essential parts of the decision making process for the voter, tax payers the business manager and the investor it’s  on important element of the total business information system, student from a verity of other discipline find the ability  to use the interpret accounting information valuable accomplishment accounting has been called the language of business in recent year corperation profit have become a topic of considerable public interest what are the corperate profit ? what levels of corperation profit are the necessary to  finance the development of now products, the new job and economic growth one commit  hopes to answers such question with out understanding the accounting concepts and terms involved in the measurement of income, the further said that accounting has made it most dimities progress in the field of business, the accounting  function is vital to every what of our society, Accounting is equally essential to the successful operation of a business  is university a fracterary as social program or a city some knowledge of accounting is needed by  all citizens if they are to act intelligently in meeting the challenges of our society. The knowledge of accounting help you use information making economic and political decision.

 

2.4     THE ROLE OF ACCOUNTANT

Dick (1964) said that an accountant tends to specialize in a given subaril of discipline just as to attorneys  and member of other profession, A business profit should employ the services of an accountants.

The further mention that an accountant should play the following roles in an organization like the some-scale industry:

  • He must keep record of the financial of firm, of money received and spent of asset bought and sold, at amounts owning to the company owners by the company.
  • He must produces a statement of a profit, or less on the years working and balance sheet showing the Passover of the firm at the date when the balance sheet is drawn up.
  • He has to record the in formed lost of it various operations so that the management known that each job or process has cost the firm this is a basis upon which prices can be fixed and production decision taken.
  • He will prepare plans future expenditure, this is done by means of budgets both for current production and for further capital expenditure.
  • He must provides information to the management for the achievement of their goals.

Holemer (1973), Stated that the cost accountant has great scope for the exercise of  ingenuity and skill to covers in the small-scale industries particularly as the average  managers is not a trained accountant and needs sears concise statement that he can readily understands.

In has opinion the accountant should reveal the course of any increase or decrease in the profit shown in the financial accounts.

Ossiona (1986) stated that in organization whether in the public or private sectors the accountant plays a major role in the development of planning and control system that will lead toward the achievement of stated goals, the accountant by his training and the professional discipline control butted to improvement of a light and austere economic condition by helping to firm wastes and advices great cost efficiency he plays a leading role in achieving diversities corporate strategies effects amalgamation and absorption for organization achieves economic and the origin section of business entries the accountant by servocity industries firm and other social organization, help to cow, the seeds of growth and development needed to bring this notion economy out of it present problems.

Further said that the needs for efficient and sophisticated accounting in Nigeria industries is not doubt, the accountant provide answers to the needs of a firm by reporting the profit and financial position of the firm, he keep tag of financial relationship with third parties or changes in their responsibility to or right agents group did individuals and information  about statement  of debits.

 

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