TABLE OF CONTENTS
Cover Page ...................................................................................................................................... i Title Page ........................................................................................................................................ ii
Declaration ...................................................................................................................................... iii
Approval ......................................................................................................................................... iv
Dedication ........................................................................................................................................ v
Acknowledgements ......................................................................................................................... vi
Table Of Contents .......................................................................................................................... vii
List of table ......................................................................................................... xii
List of Abbreviation ............................................................................................... xiv
Abstract. ............................................................................................................. xv
CHAPTER ONE: GENERAL INTRODUCTION
I . 0 Introduction ........................................................................................................................... I
1.1 Back ground of the study ...................................................................................................... 1
1.2 Statement of the problem ...................................................................................................... 4
1.3 The objectives of the study explored the major objective of the study and other objectives ......................................................................................................................................... 5
! .3.1 Major objective ..................................................................................................................... 5
1.4.1 Research questions ................................................................................................................ 5
1.4.4 Scope of the study ................................................................................................................. 6
1.5 .1 Subject scope ........................................................................................................................ 6
1.5.2 Geographical scope ............................................................................................................... 6
CHAPTER TWO: LITEERATURE REVIEW
2.0 Introduction .......................................................................................................................... 7
2.1 The concept of accounting record keeping ........................................................................... 7
2.1.1 Accounting cycle ................................................................................................................. 8
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2.1.2 Quality of recording keeping in small scale business units ................................................. 8
2.1.3 Accounting record storage and retrieval ............................................................................ 1 0
2.1.4 Acccounting record keeping manager. .............................................................................. 11
2.1.5 Record keeping system ...................................................................................................... 11
2.1.6 Documents and books used in record keeping .................................................................. 13
2.1. 7 Record keeping books: ...................................................................................................... 14
2.1.8 Book keeping methods: ..................................................................................................... 15
2.1.9 Benefits of good record keeping; ....................................................................................... 17
2.2.0. Performance management. ................................................................................................ 19
2.2.1 Performance ....................................................................................................................... 20
2.2.2 Measuring performance ..................................................................................................... 21
2.2.3 Business performance dimensions .................................................................................... 22
2.2.4 Method of measuring performance .................................................................................... 23
2.2.5 Key performance indicators ............................................................................................... 24
2.3 Relationships between accounting records and performance ............................................ 25
CHAPTER THREE: METHOLODY
3.0 Introduction ........................................................................................................................ 27
3.1 Research Design ................................................................................................................ 27
3.2 Study population ................................................................................................................ 27
3.3.1 Sample Size ........................................................................................................................ 27
3 .3 .2 Sampling Procedures .......................................................................................................... 28
3.4 Sources of Data ................................................................................................................... 28
3.4.1 Primary Sources .................................................................................................................. 28
3.4.2 Secondary sources .............................................................................................................. 28
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3.5 Instruments of Data Collection ........................................................................................... 28
3.5.1 Questionnaire ...................................................................................................................... 28
3.5.2 Interviews ........................................................................................................................... 29
3.5.3 Observation ......................................................................................................................... 29
3.6 Data Processing .................................................................................................................. 29
3.7 Data Analysis ...................................................................................................................... 29
3.8 Data Presentation ................................................................................................................ 29
3.9 Limitations and Delimitations of the study ........................................................................ 29
CHAPTER FOUR:PRESENTATION ANALYSIS AND INTERPRETATION OF FINDINGS
4.0 Introduction .......................................................................................................................... 31
4.1 Form of the business organisation ...................................................................................... 31
4.1. Demographic characteristics of respondents ....................................................................... 31
4.1.1 Age range of respondents .......................... : ......................................................................... 32
4.1.2 Gender of respondents ......................................................................................................... 32
4.1.3 Level of education of the main operator. ............................................................................. 33
4.1.4 The gender of the business proprietor. ................................................................................ 33
4.1.5 The level of education attained by the proprietor of the business ........................................ 34
4.1.6 Level of training in accounts/bookkeeping the properitor of the business has ..................... 34
4.1. 7 The experince of the proprieptor in running the business .................................................... 3 5
4.2.0 Aalysis and interpretation of the result. ................................................................................ 36
4.3 Findings on the types and how often documents/records/books issued/maintained/used in small scale business units in relation to quality ............................................................................. 36
4.3.1 Businesses keep/use/records cash reciepts ........................................................................... 36
4.3 .2 Findings on often sales invoices are used/mantained ........................................................... 3 7
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4.3.3 Findings on how often stock cards are used ......................................................................... 38
4.3.4 Findings on how often cash books are used in small scale businesses ................................ 38
4.3.5 Findings on how often is asales day book use~ in business ................................ , ................ 39
4.3.6.Findings on how often purchase daybooks are used in small scale business units .............. 40
4.3.7 Findings on how often are creditors books maintained/used in businesses .......................... 40
4.3.8 How often are debtors books used in small scale business units in Mbale municipality ..... 41
4.3.9 Findings on how often are pay roll/wage records mantained/ used in small scale business units ................................................................................................................................................ 42
4.3.10 Findings on how often businesses perform bank reconciliation ........................................ 42
4.3.11. Findings on how cheques are often used in small scale business units ............................ 43
4.4.0 Findings on accounting record keeping in small scale businesses in Mbale municipality. 44
4.4.2 Details such as date ,goods descriptiion and on cash sales are recorded ........................... 4 7
4.4.4 All bank deposits made are their deposit slip/pay inslip filed ............................................ 4 7
4.4.5 The business has its own bank account seperate from that of the proprietor. .................... 48
4.4.6 Where payement are made/settled by cheque, details of the transation are recorded ........ 48
4.4.7 All money paid out is recorded .......................................................................................... 49
4.4.8 Payment vourchers have the necessary details ................................................................... 50
4.4.11 Expenses are recorded according to their nature forexarnple rent,electricity ..................... 51
4.4.18 It is cumbersome to keep all written records of all items in stock ..................................... 52
4.4.19 The business does not offer goods on credit.. ..................................................................... 52
4.4.20 The business maintains records of its debtors .................................................................... 53
4.4.2 The business doesnot define credit periods to debtors ....................................................... 54
4.4.27 The business some time buys goods on credit.. ................................................................. 54
4.4.28 The business maintains records of all its creditors ............................................................. 55
4.5.0 Findings on performance of small scale business units ........................................................ 56
4.5.1 It is admissible that not all is going on well inthe business ................................................. 56
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4.5.2 The sale of the business have been growing relative to that of the neihboring competitor. 56
4.5.3 The number of customers appears to be decreasing with the passage of time .................... 57
4.5.4 The goods provided by the business are well tailored towards the customer taste .......... 58
4.3. The business has been regularly prompt to provide goods according to customer demands. 59
4.5 .6 The business has been in position to retain most of its regular customers ........................... 60
4.5.7 Profitability for the year is estimated as afinancial performance measure ........................... 60
4.5.8 Actual profitability for the year is compared with the estimated profitability for the year .61
4.3.9 Annual turn overs are estimated .......................................................................................... 62
4.5.10 Actual annual turn overs are compared against estimated annual turn overs ..................... 62
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.0 Introduction ........................................................................................................................... 66
5.1.0 Summary of Major Findings ................................................................................................. 66
5.1.1 Summary of General Findings .............................................................................................. 66
5.1.2 Findings on whether small scale business units keep quality accounting record keeping. 67
5.1.3 Findings on the performance of small scale business units .................................................. 67
5.2 Conclusion ............................................................................................................................ 68
5.2.1 Conclusion on Accounting Record Keeping ....................................................................... 68
5.2.2 Conclusion on performance of small scale business ............................................................ 68
5.3.1 Recommendation on quality accounting record keeping ...................................................... 68
5.3.2 Recommendations on performance of small scale business units ........................................ 69
REFERENCES ............................................................................................................................ 70 Appendix A : Introduction Letter
Appendix B : Self Administered Questionnaire
Appendix C : Time Frame
ABSTRACT
The study was about the effect of accounting record keeping and performance of small scale business units in Mbale municipality basing on the following objectives; investigate whether traders in Mbale municipality keep quality accounting records, to examine performance level of small scale business units in Mbale muncipality and to establish the relationship between accounting record keeping and performance of small scale business units in Mbale municipality.The study design comprised of a combination of both descriptive and cross sectional research designs and both qualitative and quantitative data were employed. Stratified sampling was used to determine the sample size. A sample size of 80 computed by a formula for krejcie and Morgan 1970 was considered primary data was collected by the use of questionnaires which focused on the research questions. Secondary data was got from records, books and financial statements prepared and kept by small scale business units which are in relation to the study objectives. Data entered into excel was presented by the use of frequency tables and average mean tables which showed moderate relationship between accounting record keeping and performance of small scale business units. Findings on effectiveness of accounting record keeping in small scale business units showed that accounting record keeping enhances business decision making and adjustment accounting record play a role in reduction of operating costs, improves efficiency and productively. Recommendation on the accounting record keeping in small scale business units, operators of small scale business units need to ensure that complete and accurate business records are kept to enhance business decision making and improve efficiency and productivity
