ADOPTION OF ACCOUNTING INFORMATION AS THE MAJOR TOOL FOR DECISION MAKING (A CASE STUDY OF SMALL–SCALE INDUSTRIES IN ENUGU STATE)
GENERAL OVERVIEW OF SMALL – SCALE INDUSTRIES
The small – scale industries nature of developing an economy was first heard in the 1970’s as government established industrial development centers and the small – scale industries division in the federal ministry of industries. To purchase the complete Project Material, Pay the sum of N3, 000 to our bank accounts below: BANK NAME: GUARANTY TRUST BANK (GTB) ACCOUNT NAME: CHIBUZOR TOCHI ONYEMENAM ACCOUNT NUMBER: 0044056891 After paying the sum of N3, 000, send your full name, email address and the title of the project topic as text message to our phone: 07033378184 We will send your complete project materials to your email within 10 Mins after payment.
There is no consensus in Nigeria on the definition of small – scale industries. Thus world bank report classified that An industry if the full time employees were between one and fifty
The British government … according to its act small – scale industries are thos whose turnover is less than #10,000.00 whose balance sheet totals are less than #700.00 and who employ less than fifty persons (OKOYE 1996)
Interestingly, Nigeria Bank for commerce and industry established to give financial help which defined small –scale industry.
“as organization with investment of #750,000 including working capital and excluding cost of land where the business is situated (NNENNA B. ANI 1999)government have been encouraging the small – scale industries in different ways that small scale industry could be a better catalyze to catapult Nigeria into a full grown industrialized nation. Some of the measures put in place to encourage small – scale industries are viz:
- The federal ministry of industries special funds
- Small –scale industries (SSI) scheme
- The National Directorate of Employment (NDE)
- The SME apsc unit loan scheme
- Small –scale industries corporation (SSIC)
- Nigerian Industrial development Bank (NDIB)
- Nigerian Bank for Commerce and Industry (NBCI)
Despite al these, yet much is expected fro the three tiers of government in terms of welfare, better finding in uplifting our battered economy
Small – scale industries in Nigeria because they are owned in most cased by semi – illiterates lack vital information that would have help them a lot and they wallow in ignorance
Here government is expected to be organizing workshop, seminars especially for future professional accountants who will hammer on the importance of accountant and the use of accounting information in making decision.
To purchase the complete Project Material, Pay the sum of N3, 000 to our bank accounts below:
BANK NAME: GUARANTY TRUST BANK (GTB)
ACCOUNT NAME: CHIBUZOR TOCHI ONYEMENAM
ACCOUNT NUMBER: 0044056891
After paying the sum of N3, 000, send your full name, email address and the title of the project topic as text message to our phone: 07033378184
We will send your complete project materials to your email within 10 Mins after payment.
Also, bringing small –scale industries owners together and giving them a good business orientation on the tips of survival thus, accounting information is the life wire of every small –scale business information is money
A small – scale business owners must design and maintain the following information
- Information on internal and operational activities of the business includes financial and cost accounting (NZELIBE 1996)
TYPES OF ACCOUNTING INFORMATION
There are only two information provided by the accountants as
- Financial accounting information
- Cost and management accounting.
FINANCIAL ACCOUNTING INFORMATION
This is the type of accounting information meant for outsiders and is primarily concerned with recording, classifying and communicating financial information in a set of basic general purposes of financial statements
ENVIRONMENT OF FINANCIAL ACCOUNTING
The environment of accounting consists of social – economic, political – legal conditions, restraints and influences
Accounting recognizes that man lives in a world of scarce means and resources.
It also recognizes and accept the current legal and ethical ideas of property and other rights.
Finally, recognizes the cousin-ship of and control over property to others
COST ACCOUNTING INFORMATION
This is concerned with the cost accumulation and allocation of manufacturing costs to products. The cost accounting information is meant for the internal management of the form
COST
A cost is an expenditure or a resources scarified or foregone to achieve a specific objective. Horngren and Foster (1900 pg. 20)
There are different types of costs which are used in decision making. They are as follows
- Direct cost: Direct cost are outlays that can be identified with a specific product
- Variable costs: Variable cost vary in direct proportion to the volume of activity such include direct labor direct material and indirect overheads
- Fixed costs: A fixed cost remains constant in total as the level of activity changes
- Semi – variable cost: This includes both a fixed and variable component. The formula use is Y = a + bx
Where
Y = Dependent variables which represents the semi – variable cost or mixed cost
a = represents the fixed element
b = coefficient determining the volume units
x = is the variable element.
Sunk cost: They are cost that have been created by a decision made in the past and which cannot be changed by any decision that will be made in the future.
Product cost: These are costs which are associated with production. They are considered asd manufacturing costs which the accountant attaches to the product included in the stock valuation.
Relevant cost: These are expected future cost which represents the difference in cost among alternatives. The cost is very pertinent for decision making
Opportunity costs: This cost is that which measures the opportunity cost or scarified when the choice of one course of action requires that an alternative course of action be given up (Dury 1990 pg 280
In OGUNJIMI in “Foundation of Business Administration” by Prof. Pita Ejiofor observed that the accountant presents accounting information to the society. According to him. The society includes both direct and indirect user of accounting information
They are
- Creditors
- Potential investors
- Consumers
- Employees
- Financial analysts
- Stock exchange
- Stock brokers
- Suppliers
- Lawyers
- Financial press
- Reporting agencies
- Trade associations
- Trade labor union
The entire public can be grouped into four groups that needed the accounting information we have accounting information for the government, accounting information for management, accounting information for society, accounting information for professional bodies. There are illustrated diagrammatically thus
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