DEBRE MARKOS UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF ACCOUNTING AND FINANCE

This is to certify that the senior essay entitled “assessment of accounting and reporting practice
of small business enterprises in Debre Markos town” and submitted in partial fulfillment of the
requirements for the award of Bachelor Degree in Accounting and Finance complies with the
regulation of the university and meets the accepted standards with respect to originality and
quality.

Candidates

Name Signature Date

1. Samuel Taye

2. Abrham Demessie

3. Negesse Wodaje

Advisor:

Name: Signature Date

Signature of Board of Examiners (BoE)

Examiners’

Name Signature Date

1.

2.

I
 ACKNOWLEDGEMENT
First and for most, we would like to express our heartfelt thanks to our God for our life and
abilities he put in us to successfully complete this research. Our limitless thanks goes to our
advisor Mrs. Edilawit G. Department of Accounting and finance, University of Debre Markos for
painstakingly seeing us through the arduous task of BA studies, and also for her unflinching
support and relentless advice to ensure the completion of the research and our studies.

We would also like to thank small sized enterprise manager and owners for their cooperation in
providing us all the necessary data for our study and their willingness in providing us the
necessary information.

Lastly, our thanks extend to our dear families to the bottom of our heart for their
encouragements, morals and financial supports throughout this study deserves .

II
 TABLE OF CONTENTS
Content page no

ACKNOWLEDGEMENT ............................................................................................................................ II
TABLE OF CONTENTS ............................................................................................................................. III
LIST OF TABLES ........................................................................................................................................ V
LIST OF FIGURES ..................................................................................................................................... VI
ACRONYMS .............................................................................................................................................. VII
ABSTRACT................................................................................................................................................. VIII
CHAPTER ONE ........................................................................................................................................... 1
1. INTRODUCTION .................................................................................................................................... 1
1.1 Background of the Study .................................................................................................................. 1
1.2. Statement of the problem ................................................................................................................ 3
1.3 Objective of the study ....................................................................................................................... 5
1.3.1 General objective........................................................................................................................ 5
1.3.2 Specific objective ........................................................................................................................ 5
1.4 Significance of the study ................................................................................................................... 5
1.5 Scope of the study.............................................................................................................................. 5
1.6 Limitation of the study ..................................................................................................................... 5
1.7 Organization of the study ................................................................................................................. 5
CHAPTER TWO .......................................................................................................................................... 6
2. LITERATURE REVIEW ......................................................................................................................... 6
2.1 Definition of small businesses........................................................................................................... 6
2.1.1 The Role and Importance of Small Businesses ........................................................................ 8
2.1.2 Problems of small scale business............................................................................................... 9
2.2 Empirical evidence ............................................................................................................................ 9
2.2.1 Accounting practice ................................................................................................................... 9
2.2.3 Financial Report....................................................................................................................... 14
2.2.4 Preparation and Reporting of financial statements .............................................................. 15
2.2.5 The effects of failure to prepare financial reports on Small Scale Enterprise ................... 15
2.3 Research gap.................................................................................................................................... 16
CHAPTER THREE .................................................................................................................................... 17

III
3. RESEARCH METHODOLOGY ............................................................................................................ 17
3.1 Research design ............................................................................................................................... 17
3.2 Type and source of data.................................................................................................................. 17
3.3 Method of data collection ............................................................................................................... 17
3.4 Target population............................................................................................................................ 17
3.5 Sample size....................................................................................................................................... 17
3.6 Sampling Technique ....................................................................................................................... 18
3.7 Data analysis and interpretation ................................................................................................... 18
CHAPTER FOUR....................................................................................................................................... 19
4. DATA ANLYSIS AND INTERPRTATION ......................................................................................... 19
4.1 Demographic Background ............................................................................................................. 19
4.2 Keeping Accounting Records ......................................................................................................... 21
4.4 Types of Accounting Records Being Kept and Maintained by SE’s .......................................... 22
4.5 Motivation/Purpose for Maintaining Accounting Records ......................................................... 23
4.6.1 Income statement period ......................................................................................................... 23
4.6.2 Income Statement (statement of profit or loss on the enterprises) ...................................... 24
4.7 Statement of balance sheet ............................................................................................................. 24
4.7.1 Statement of balance sheet nature .......................................................................................... 24
4.7.2 Statement of balance sheet period .......................................................................................... 25
4.9.2 Reports by small enterprise period ........................................................................................ 26
4.9.3 The Address of the report ....................................................................................................... 27
4.9.4 Reasons for not preparing reports ......................................................................................... 27
CHAPTER FIVE ........................................................................................................................................ 29
5. CONCLUSION AND RECOMMENDATION ...................................................................................... 29
5.1 Conclusion ....................................................................................................................................... 29
5.2Recommendation.............................................................................................................................. 30
REFERENCES ........................................................................................................................................... 31
APPENDICES ............................................................................................................................................ 35
Appendix 1: (English Questionnaires) ........................................................................................................ 35
Appendix 2: (Amharic Questionnaires) ...................................................................................................... 39

IV
 LIST OF TABLES

Table 4.1: Demographic background of the respondents--------------------------------------------19

Table 4.2: Response on whether the firm maintains accounting records or -----------------------21
Table 4.3: Reasons why SEs does not keep accounting records-------------------------------------21
Table 4.4: Types of accounting records being kept and maintained by SEs-----------------------22
Table 4.5: Motivation/purpose for maintaining accounting records --------------------------------23
Table 4.6.1: Income statement period -------------------------------------------------------------------23
Table4.6.2: Statement of profit or loss on the enterprises --------------------------------------------24
Table 4.6.3: Option of small enterprises when there is no profit-------------------------------------24
Table 4.7.1: Statement of balance sheet nature --------------------------------------------------------24
Table 4.7.2: Statement of balance sheet period---------------------------------------------------------25
Table 4.8: -Suggestions on How to Improve the Accounting Practices of SE‟s -------------------25
Table 4.9.1: Response on whether the firm prepares reports or not ---------------------------------26
Table 4.9.2: Period of report-------------------------------------------------------------------------------26
Table 4.9.3: Address of the report-------------------------------------------------------------------------27
Table 4.9.4: Reasons for not preparing reports----------------------------------------------------------27
Table4.10: Suggestions on How to improve the Reporting Practices of SE‟s-----------------------28

V
 LIST OF FIGURES
Figure 1:- The process of accounting............................................................................................ 10
Figure 2:-The qualitative characteristics of accounting information ............................................ 14

VI
 ACRONYMS
IASB- International accounting standard board

SE‟S-Small enterprises

GDP-Gross domestic product

GTP-Growth and transformation plane

MSE-Micro and small enterprise

MSME- Micro, small and medium sized enterprise

SME -Small and medium sized enterprise

NICs-New Industrialized Countries

OECD- Organization for Economic Cooperation and Development

UK-United kingdom

US$/ USD - United States dollar

VII
 ABSTRACT
This research is entitled as “assessment of accounting and reporting practices of SE’s in
DebereMarkos Town.” Both primary and secondary data were used. The primary data were
collected from the total number of 96 respondents using questionnaire. This study reveals that
53% of SE’s keep accounting records which are mainly, Balance Sheet, retained earnings, Profit
and loss Account, Cash Flow statement respectively, and the main purpose of keeping records is
to track the receivables and payables, to evaluate performance and To determine the size of
business.46.8% of SE’s do not keep accounting records because they perceive that It requires
technical skills and knowledge, It is difficult to maintain the system, it is unnecessary and time
consuming. However they also provide suggestion to improve the accounting practices by
Organize training for managers and owners, Make the use of accounting record mandatory,
Educate managers/owners on the need to keep accounting records and Offer free accounting
service. The firms which maintain Accounting and financial records have an effect on the
financial performance. Therefore, in order to improve the accounting and financial practices of
SE’s, the concerned bureau needs to implement the suggestions put forward by the respondent.

VIII
 CHAPTER ONE

1. INTRODUCTION
1.1 Background of the Study
Small businesses are integral part of every nation‟s economy activity. They play a vital role in
nations building. The contribution of small enterprise to the economy development of most
developing countries in overwhelming and plays a political role through employment generation,
increasing the standard of living and maintain a balance regional development (Mittal and batra,
2004).However, in Ethiopia, it depends up on the capital investment of which 20,000 -500,000 birr
for small and less than 20,000 birr for micro enterprises. Small business enterprise is a business
enterprise that employs a small number of workers (10 to 20 employees) and does not have a high
volume of sales that means the amount of sale made by this business enterprise is low. Such
enterprise is generally privately owned. Small business enterprise helps to stimulate local
economies by providing local individual with job, as well as product and services to community
members. (Hailay, 2003)

The major objective of the study is to obtain information concerning accounting practice and
reporting in small business enterprise to deal with their accounting cycle, financial statement and
reporting of small business enterprises. The study also initiates the government to pay a due
attention to the promotion and development of small business enterprises. Since small business
enterprises play an important role in economic growth and sustainable development of every
nation (Mary, 2003).

Since the 1960s to date, SEs have been given due recognitions especially in the developed nations
for playing very important roles towards fostering accelerated economic growth, development and
stability within several economies. They make-up the largest proportion of businesses all over the
world and play tremendous roles in employment generation, provision of goods and services,
creating a better standard of living, as well as immensely contributing to the gross domestic
products (GDPs) of many countries (OECD 2000). Over the last few decades, the contributions of
the SEs sector to the development of the largest economies in the world have beamed the
searchlight on the uniqueness of the SEs; and this have succeeded in overruling previously held
views that SEs were only “miniature versions” of larger companies (Al-Shaikh 1998). However, it
appears that considering the enormous potentials of the SEs sector, and despite the
acknowledgement of its immense contribution to sustainable economic development, its
performance still falls below expectation in many developing countries (Arinaitwe 2006). This is
because the sector in these developing countries has been bedeviled by several factors militating
against its performance, and leading to an increase in the rate of SEs failure. These factors include
the unfavorable and very harsh economic conditions resulting from unstable government policies;
gross under capitalization, strained by the difficulty in accessing credits from banks and other
financial institutions; inadequacies resulting from the highly dilapidated state of infrastructural

1
facilities; astronomically high operating costs; lack of transparency and corruption; and the lack of
interest and lasting support for the SEs sector by government authorities, to mention a few (Oboh
2002, Wale-Awe 2000).

Despite the importance of financial reporting, management accounting and control practices, it is
unfortunate to find that these practices are often inadequate and lacking among SEs. Except for
yearly taxation returns and some form of profit and loss statements, other statements such as
balance sheet, cash flow statement, fund statement, production report, variance report, are
infrequently used. These rather limited usage of financial and management accounting reports
could be attributed to SEs‟ inability to employ professional managers with functional
specialization especially in the financial area due to their limited financial resources. Without
adequate, effective and timely financial reports and analysis, the SEs are losing out on the benefits
from those\ practices such as improved monitoring of financial health and progress, improved
ability to anticipate fortunes or failures, better assessments of financial risks and greater ease in
financial planning and control. Most importantly, in the context of SEs requiring extra capital to
grow, regular financial reports can provide indications on their ability to produce steady cash flows
and to service debt. It has been established that the use of appropriate financial reporting and
management accounting practices could be one of the determinants of company survival
particularly SEs (Gorton, 1999; Holmes, 1991). To ensure the contribution of SME‟s to the
economy the enterprise should perform efficiently, which is effective through practicing
accounting system and having an access to finance. In Ethiopia these enterprise may not practice
accounting and reporting or not practicing formal accounting and reporting system and has no
well-developed access to finance. The aim of this paper is to assess the accounting and reporting
practice of SE‟s in Debre Markos town.

There are problems which leads to the failure of small business enterprises in our studies, which
are the poor management or administrative skills of the manager, insufficient capital invested by
the owner, an over reliance on external borrowing, poor record keeping, insufficient use of
accounting information to support their financial decision making and the low quality and
reliability of financial data are part of the main problem of small business enterprises (Hailay,
2007).

The empirical result of the small business enterprise is the measurement of accounting practice:
Based on the evidence presented previously the accounting practice of small business enterprise is
measured based on their normal record system, preparation of balance sheet and income statement.
Based on this firms with no maintain any accounts , firms with only keeping records do not
maintain financial reports are considered maintaining minimum accounts, and firms with
standardized recording system based on International Standard Accounting Board, prepare balance
sheet and income statement is considered as a firm maintaining formal accounting practice. The
major point that we study about small business enterprise is to assess the problem of accounting
practice of small business enterprise in DebreMarkos town and to assess the challenges of
unemployment, poor economic growth and inequalities of small business enterprise on the
2
economy. So the main point is to be systematic to alleviate the problem and to promote the growth
of small business enterprises (Mary, 2003).

Accounting is the process of identifying, measuring and communicating economic information to

permit informed judgment and decisions by the user of the information.

Accounting information is used by every profit seeking business organization that has economic
resources and non-profit organizations. The accounting system used by a profit seeking business
may be viewed as an information system designed to provide relevant financial information on the
resources of a business and the effects of the use of those resources (Fess and warren, 21St
edition).

Accounting cycle is a complete sequence of accounting procedures that is repeated in the same
order during each accounting period. It includes journal translation, posting ledger account,
prepare worksheet, prepare financial statement, adjusting and closing entries and prepare post-
closing trial balance. Transaction and events exists in any business type and they can be handling
as an effective as possible. This study is focuses on small business enterprises with a paid up
capital of up to Br. 500,000 excluding high technological establishments (Fees and Warren, 24th
edition).

The study is relevant in the Ethiopia context given the important role SEs play in the economic
development. There is the need to explore the accounting practices of SEs in Ethiopia and to
ascertain whether they are able to meet the expectations of finance providers. This will improve
SEs access to funds and improve the performance of the general level of economic activity. The
study will add to the literature on accounting and reporting of SEs and therefore add to a body of
knowledge. The study will also have important policy implications for the government of Ethiopia
and SEs in general.

1.2. Statement of the problem

Since the government of Ethiopia introduced SE strategy and started rendering its support to SE‟s
the private sector has rapidly grown in terms of number, capital and employees. The number of
private businesses and limited companies had quickly risen and the majorities are SEs. For
instance, at the end of the first GTP, the government has planned to establish about three million
MSE‟s in the country. Fortunately, the government has surpassed this plan by creating above six
million MSE‟s. The increase has partly resulted from the extensive growth of the number of
graduates from universities, technical & vocational colleges.

Despite government‟s commitment to support SE‟s and the achievements and contributions as
mentioned above, researches in the field indicates that SE‟s in Ethiopia are currently being faced
with many serious difficulties such as shortage of capital for expanding and renovating equipment
and technology, low productivity and competitiveness, lack of experience in terms of marketing,
and financial management.

3
Specifically, studies conducted in the capital city, Addis Ababa indicates that entrepreneurs who
set up these enterprises lacked business management skills, capital, and as such, many of them
faced a number of problems that include poor record keeping and financial management, which
resulted in failure of most of such enterprises (Mosisa, 2011).of these difficulties, lack of financial
management are currently the most serious issue found in most research output (Ageba and Amha,
2006).

Lack of source of finance and inefficient financial management may negatively affect SEs‟
profitability and as a result, the difficulties of business enterprises will become greater.
Conversely, efficient accounting and financial management will help SEs to strengthen their
profitability and, as a result, these difficulties can partly be overcome. SEs that keeps proper record
of revenues and expenses know the profitability of their firm very easily. Further, keeping record
of assets and liabilities will help to know the financial position of the enterprises at any time, helps
to make strategic business decisions, secure credit from lending financial institution and pay
reasonable amount of tax to the government (Mosisa, 2011).

The main factors that contribute to success or failure of small business are categorized as internal
and external factors. The external factors include financing (such as the availability of attractive
financing), economic conditions, competition, government regulations, technology and
environmental factors. The internal factors are managerial skills, workforce, accounting systems
and financial management practices. SE‟s often face problems with regard to access to finance
which is associated with accounting practices. The problem the enterprises faces are that
associated with accounting practices includes; it is very difficult to give information on their
income and expenses (they do not know whether they have lost or profited from their business
activities), in presenting their financial position, management decisions and this leads problem on
access to finance (Mosisa, 2011).

The absence of recording will cause some problems in handling customer needs, particularly in
maintenance services and also in cases of sales on credit services. The lack of recording also
makes it very difficult for the tax offices to levy reasonable taxes that are commensurate with the
business activities. As a result, businesses operators complain on the taxes that are levied on them
on the basis of estimation which they say are too heavy to bear. The purpose of this research is to
assess the accounting and reporting practice of small enterprises in Debre Markos town. Thus, in
this study the researchers try to answer the following questions.

- What type of accounting records being kept and maintained by small business enterprise?
- What are the major purpose for maintain accounting records?
- What are the reasons for not keeping accounting records?
- How to improve the accounting practice of small enterprise?

4
1.3 Objective of the study
1.3.1 General objective
The general objective of this study is to assess the accounting and reporting practice of small
enterprise in Debre Markos town.

1.3.2 Specific objective

1. To investigate the types of accounting records being kept and maintained by small
enterprise.
2. To analyze the purpose for maintain accounting records.
3. To find out the reasons for not keeping accounting records.
4. To provide suggestions on how to improve the accounting practice of the small enterprise.

1.4 Significance of the study

The outcome of the study provides important information to the Policy makers in order to make
further investigation and to take necessary measures to reduce disputes with customers on issue
related to claim settlement. It motives the academicians in order to identity the problem that causes
the growth of small business enterprises and to find the solution for the problem. The study also
gives the information to the organization for the importance of accounting in the wise use of
resources, forecasting, measuring their operating and financial information to make possible
comparison as to know the profitability of small business enterprises in DebreMarkos town.

1.5 Scope of the study

The study will delimited to Debre Markos town in assessment of accounting and reporting practice
of small enterprises specifically business includes manufacturing, construction, service, urban,
agriculture and trade. And the research paper will be conducted in 2010 E.C.

1.6 Limitation of the study

First of all shortage of time will not allow the researchers to collect information from all small
business enterprises. Again the outcome will be on the information solicited from the respondent
and therefore subject to human error, omission and possible misstatement.

1.7 Organization of the study

The study will be organized in five chapters. Chapter one deals with the introduction part which
includes introduction, statement of the problem, objective of the study, scope of the study and
limitation of the study. Chapter two deals with literature review, chapter three deals with research
design, type and source of data, method of data collection, target population, sample size, sample
technique and data analysis. Chapter four deals with data analysis and interpretation and the last
fifth chapter deals conclusion and recommendation.

5
 CHAPTER TWO

2. LITERATURE REVIEW
2.1 Definition of small businesses
According to the research conducted by Rajan (2013) states that the definition of small scale
industry may vary from country to country, year to year, from period to period and from time to
time and according to the level of economic development reached in a country. Sometimes it is
defined in terms of number of workers employed and on the use of electric power and also in terms
of investment made. Despite of this, small Scale Enterprise when established varies in its mode of
formation, its sizes, its organizational setup, and in its activity. The reason for this is because the
type chosen by each individual operator will depend on the financial capability to manage such
enterprise.

In attempting to conceptualize SE‟s in Ethiopia, some points need to be stressed. First, there is no
generally accepted definition of small enterprise. Secondly, small businesses are generally quite
responsive to their environment and our environment changes fast. Changes in the environment
therefore affect what constitutes a small business at a particular point in time. Thirdly, what the
definition aims at is to set some limits (lower and upper) that will assist in achieving the set
purpose. Such limits can be in terms of level of capitalization, sales volume and number of
employees. A clear definition may be useful in a particular national context but it may not be
practical to attempt a universal definition. An attempt is made to present some definitions of SEs to
demonstrate the divergence in definition across countries (Mosisa, 2011).
Therefore there is no universal definition of SE‟s since the sector is diverse and flexible that resists
any narrow categorization. The definitions given to SE‟s and applied vary from country to country
and also mean different things to different people, even within the same country. The definition of
SE is based on five main parameters; labor, capital, loan size, fixed asset and annual sales
turnover. Organizations often use one criterion to define SE‟s. The size limit is one of the most
common definitions in developing countries. Some countries use one criterion to define this sector
while others may have definitions with multiple criteria. For example South Korea defines SE on
the basis of 'capital or assets', while Canada defines this term on the basis of ‟number of
employees' and „gross sales or taxable income'. This also appears to be true in the case of Ethiopia.
This lack of consistent definition has eventually led to be confusion and failure to distinguish
between one segment and another and has significant implications on the structure of interventions
and promotional support that could be provided to the section (Mosisa, 2011).

Small business enterprises are business that employees a small number of workers and do not have
a high volume of sales such enterprises are generally privately owned and operated sole
proprietorships, and partnerships (Mary, 2003).
Furthermore, the study made by Wolfe son (2001), the small business sector is recognized as an
integral component of economic development and a crucial element in the effort to lift countries
out of Small- Scale businesses are driving force for economic growth, job creation, and poverty

6
reduction in developing countries. They have been the means through which accelerated economic
growth and rapid industrialization have been achieved (Saucer, 2005).

To see some of the definition as an example; to support and develop these businesses, the
European Union has introduced a new definition of SE valid from January 1, 2005.SE‟s are
defined by three main criteria: the number of employees, annual turnover in Millions of Euros and
total value of assets in millions of Euros.
Table 2.1European Union division of SME‟s

Size Number of Turnover in EUR Balance sum in

employees EUR

Medium enterprises 50 -249 Max. 50.mil Max. 43 mil.

Small enterprise 10 -49 2 mil.-10 mil 2 mil.-10 mil

Source: http://www.czechinvest.org/definice-msp

In the developed or industrialized countries like United State of America and Canada, Small
business is defined in terms of annual turnover and the number of paid employees. In 1987 for
example, the manufacturing sector of the United State of America has as small scale business
when the number of employees is between 20 and 49. In the UK that same year, small business is
said to employ between 1 and 99 employees. In 1990, Japan level of employment in the small scale
ranges between 20 and 49 in the manufacturing sector (Ekpenyong, 1997).

In the New Industrialize Countries, the definition of SEs also varied and is mostly based on the
number of employees and the value of assets. In Taiwan, the small scale business was defined as a
business with less than 5 employees in 1991 in the manufacturing sector. The South Korea defined
small scale enterprise in 1988 as any business that employs 5 to 19 without sectorial specification.
In Bangladesh small firm employed from 20 to 99 in the manufacturing sector in 1986.In Bolivia,
a small scale employed 1 to 9in 1992 (Hallberg, 1999).

In Philippines, small industry is defined qualitatively, in terms of employment or asset size.

Qualitatively, small scale industries are manufacturing and/or industrial service enterprises in
which the owner manager(s) are not actively engaged in production but perform the varied range
of tasks involved in guidance and leadership without the help of specialized staff. The employment
size is 5 to 99 employees and the asset size of p250,000. In 1986, the definition was drastically
changed to cover all enterprises except agricultural farms which have assets of p500, 000 to
p5million (US$25,000 to US$250,000) (Ekpenyong, 1995).

In Ethiopia there is no clear definition of SE‟s. Only paid up capital is used for the categorization
of business as micro, small and large. Small size enterprises are those enterprises with paid up

7
capital of above Birr20, 000 and not exceeding Birr 500,000 excluding high tech constancy firms
(Manufacturing enterprises) and other high tech establishments(Addis Ababa MSME‟S 2010).

2.1.1 The Role and Importance of Small Businesses

Small firms, however they are defined, constitute the bulk of enterprise in all economies in the
world. These firms also make significant contributions to private sector output and employment, a
contribution which appears to be increasing over time (Storey, 1994). More than 95% of all firms
in the economies of the European Community are classified as „small‟. These firms make a major
contribution to private sector output and employment, a contribution which appears to be
increasing over time (Storey, 1994).To Scarborough, of 29.3million businesses in United States
today, nearly 29.2 million or 99.7 percent constitutes small business thriving virtually in every
industry. The small businesses employ 50.2 percent of the private sector workforce and pay 45
percent of the total private payroll in United States.

The importance of SEs sub-sector cannot be overemphasized. The sub-sector contributes

significantly in achieving various socioeconomic objectives, which include employment
generation, contribution to national output and exports, fostering new entrepreneurships and
providing a foundation for the industrial base of the economy (Inang and Ukpong, 1992). In low
income countries with Gross National Product (GNP) per capita of between US$100 and US$500,
SMEs account for over 60 per cent of GDP and 70 percent of total employment; in middle income
countries, the SMEs produced close to 70 percent of GDP and 95 percent of total employment; and
in OECD countries, SMEs constitute the majority of firms and contribute over 55 percent of GDP
and 65 percent of total employment (Basu, et. aI., 2005).

The Small Enterprises play a critical role in both developing and developed countries. The East
Asian countries miracle was partly as a result of a vibrant SEs subsector, which triggered the up-
surge in exports and subsequent development of the industrial sector (Stiglitz 1996). For example,
the New Industrialized Countries (NICs) like Singapore, Taiwan, South Korea, Malaysia,
Indonesia and China among others, were able to achieve economic growth through the activities of
SEs which later contributed to the transformation of the Large-Scale enterprises. The Republic of
China over the years, despite her large population, has been able to generate employment and
income for her teeming population through the activities of the SEs (Mosisa, 2011)

Ethiopia introduced MSE strategy and started rendering its support to MSEs; the private sector has
rapidly grown in terms of number, capital and employees. The number of private businesses and
limited companies had quickly risen and the majorities are MSE‟s. For instance, at the end of the
first GTP, the government has planned to establish about three million MSE‟s in the country.
Fortunately, the government has surpassed this plan by creating above six million MSE‟s. The
increase has partly resulted from the extensive growth of the number of graduates from
universities, technical & vocational colleges (Deresse and Zerihun, 2017).

8
2.1.2 Problems of small scale business
Small businesses often face a variety of problems related to their size. A frequent cause of
bankruptcy is mismanagement of funds. This is often a result of poor accounting procedures rather
than undercapitalization and economic conditions. Again, when they first start out, many small
business owners underprice their products to a point where even at their maximum capacity, it
would be impossible to break even. Cost controls or price increases often resolve this problem.
This requires accounting knowledge. In spite of the importance of accounting and reporting of
financial information, it is unfortunate to find that these practices are often inadequate and lacking
among SE‟s. These rather limited usage of financial and management accounting concepts could
be attributed to many factors. The first and the major reason is SEs‟ inability to employ
professionals in accounting and finance is due to their limited financial resources. In addition, lack
of awareness of SEs owners on the benefits of keeping accounting record and fear of high tax
liability as a result of honestly keeping real record of financial transactions are reasons for lack of
appropriate accounting record (Lakew&Kolech, 2013).

2.2 Empirical evidence

Researchers have been carried out on the assessment of accounting and reporting practice of SEs.
So this part of the paper presents the empirical evidence on the idea of the paper. The empirical
evidence below is presented consecutively based on the concept of evidence.

2.2.1 Accounting practice

Accounting is said to be the "language of business" because it deals with processing, interpreting
and communicating information about a company's operations and finance to internal and external
users. In 1941, The American Institute of Certified Public Accountants (AICPA) had defined
accounting as the art of recording, classifying, and summarizing in a significant manner and in
terms of money, transactions and events which are, in part at least, of financial character, and
interpreting the results thereof‟. With greater economic development resulting in changing role of
accounting, its scope, became broader. In 1966, the American Accounting Association (AAA)
defined accounting as „the process of identifying, measuring and communicating economic
information to permit informed judgments and decisions by users of information‟.

9
 The accounting
process

Accounting “links”

Decision-makers

Economic event With the economy activities Communicating

accounting
And With the result
information
Of their decisions

Decision-makers
(internal and
external users)

Figure 2.1:- The process of accounting

In 1970, the Accounting Principles Board of AICPA also emphasized that the function of
accounting is to provide quantitative information, primarily financial in nature, about economic
entities, that is intended to be useful in making economic decisions. Accounting can therefore be
defined as the process of identifying, measuring, recording and communicating the required
information relating to the economic events of an organization to the interested users of such
information. In order to appreciate the exact nature of accounting, we must understand the
following relevant aspects of the definition:

• Economic Events
• Identification, Measurement, Recording and Communication
• Organization
• Interested Users of Information

2.2.1.1 Economic Events

A business organization involves economic events. An economic event is known as a happening of
consequence to a business organization which consists of transactions and which are measurable in
monetary terms. For example, purchase of machinery, installing and keeping it ready for
manufacturing is an event which comprises number of financial transactions such as buying a

10
machine, transportation of machine, site preparation for installation of a machine, expenditure
incurred on its installation and trial runs. Thus, accounting identifies bunch of transactions relating
to an economic event. If an event involves transactions between an outsider and an organization,
these are known as external events. The following are the examples of such transactions:

• Sale of Reebok shoes to the customers.

• Rendering services to the customers by Videocon Limited.

• Purchase of materials from suppliers.

• Payment of monthly rent to the landlord.

An internal event is an economic event that occurs entirely between the internal wings of an
enterprise, e.g., supply of raw material or components by the stores department to the
manufacturing department, payment of wages to the employees, etc.

2.2.1.2 Identification, Measurement, Recording and Communication

Identification: It means determining what transactions to record, i.e., to identity events which are
to be recorded. It involves observing activities and selecting those events that are of considered
financial character and relate to the organization. The business transactions and other economic
events therefore are evaluated for deciding whether it has to be recorded in books of account. For
example, the value of human resources, changes in managerial policies or appointment of
personnel are important but none of these are recorded in books of account. However, when a
company makes a sale or purchase, whether on cash or credit or pays salary it is recorded in the
books of account.

Measurement: It means quantification (including estimates) of business transactions into financial

terms by using monetary unit, viz. rupees and paise as a measuring unit. If an event cannot be
quantified in monetary terms, it is not considered for recording in financial accounts. That is why
important items like the appointment of a new managing director, signing of contracts or changes
in personnel are not shown in the books of accounts.

Recording: Once the economic events are identified and measured in financial terms, these are
recorded in books of account in monetary terms and in a chronological order. Recording is done in
a manner that the necessary financial information is summarized as per well-established practice
and is made available as and when required.

Communication: The economic events are identified, measured and recorded in order that the
pertinent information is generated and communicated in a certain form to management and other
internal and external users. The information is regularly communicated through accounting reports.
These reports provide information that are useful to a variety of users who have an interest in
assessing the financial performance and the position of an enterprise, planning and controlling
business activities and making necessary decisions from time to time. The accounting information

11
system should be designed in such a way that the right information is communicated to the right
person at the right time. Reports can be daily, weekly, monthly, or quarterly, depending upon the
needs of the users. An important element in the communication process is the accountant‟s ability
and efficiency in presenting the relevant information.

2.2.1.3 Organization
Organization refers to a business enterprise, whether for profit or not-for-profit Motive. Depending
upon the size of activities and level of business Operation, it can be a sole-proprietary concern,
partnership firm, cooperative society, company, local authority, Municipal Corporation or any
other association of persons.

2.2.1.4 Interested Users of Information

Accounting is a means by which necessary financial information about business enterprise is
communicated and is also called the language of business. Many users need financial information
in order to make important decisions. These users can be divided into two broad categories:
internal users and external users. Internal users include: Chief Executive, Financial Officer, Vice
President, Business Unit Managers, Plant Managers, Store Managers, Line Supervisors, etc.
External users include: present and potential Investors (shareholders), Creditors (Banks and other
Financial Institutions, Debenture holders and other Lenders), Tax Authorities, Regulatory
Agencies (Department of Company Affairs, Registrar of Companies, Securities Exchange Board of
India, Labor Unions, Trade Associations, Stock Exchange and Customers, etc. Since the primary
function of accounting is to provide useful information for decision-making, it is a means to an
end, with the end being the decision that is helped by the availability of accounting information.

2.2.2 Accounting as a Source of Information

As discussed earlier, accounting is a definite processes of interlinked activities, (refer figure 2.1)
that begins with the identification of transactions and ends with the preparation of financial
statements. Every step in the process of accounting generates information. Generation of
information is not an end in itself. It is a means to facilitate the dissemination of information
among different user groups. Such information enables the interested parties to take appropriate
decisions. Therefore, dissemination of information is an essential function of accounting. To be
useful, the accounting information should ensure to:

• provide information for making economic decisions;

• serve the users who rely on financial statements as their principal source of information;
• provide information useful for predicting and evaluating the amount, timing and uncertainty of
potential cash-flows;
• provide information for judging management‟s ability to utilize resources effectively in meeting
goals;
• provide factual and interpretative information by disclosing underlying assumptions on matters
subject to interpretation, evaluation, prediction, or estimation; and

12
• provide information on activities affecting the society.
2.2.2.1Branches of Accounting
To meet the ever increasing demands made on accounting by different interested parties such as
owners, management, creditors, taxation authorities etc., the various branches have come into
existence. There are as follows:
1. Financial accounting: -The object of financial accounting is to ascertain the results (profit or
loss) of business operations during the particular period and to state the financial position (balance
sheet) as on a date at the end of the period.
2. Cost accounting: -The object of cost accounting is to find out the cost of goods produced or
services rendered by a business. It also helps the business in controlling the costs by indicating
avoidable losses and wastes.
3. Management accounting:-The object of management accounting is to supply relevant
information at appropriate time to the management to enable it to take decisions and effect control.
2.2.2.2Qualitative Characteristics of Accounting Information
Qualitative characteristics are the attributes of accounting information which tend to enhance its
understandability and usefulness. In order to assess whether accounting information is decision
useful, it must possess the characteristics of reliability, relevance, understandability and
comparability.
Reliability
Reliability means the users must be able to depend on the information. The reliability of
accounting information is determined by the degree of correspondence between what the
information conveys about the transactions or events that have occurred, measured and displayed.
Reliable information should be free from error and bias and faithfully represents what it is meant
to represent. To ensure reliability, the information disclosed must be credible, verifiable by
independent parties use the same method of measuring, and be neutral and faithful (refer figure
2.2).
Relevance
To be relevant, information must be available in time, must help in prediction and feedback, and
must influence the decisions of users by:
(a) Helping them form prediction about the outcomes of past, present or future events; and/or
(b) Confirming or correcting their past evaluations.
Understandability
Understandability means decision-makers must interpret accounting information in the same sense
as it is prepared and conveyed to them. The qualities that distinguish between good and bad
communication in a message are fundamental to the understandability of the message. A message
is said to be effectively communicated when it is interpreted by the receiver of the message in the
same sense in which the sender has sent. Accountants should present the comparable information
in the most intelligible manner without sacrificing relevance and reliability.
Comparability

13
It is not sufficient that the financial information is relevant and reliable at a particular time, in a
particular circumstance or for a particular reporting entity. But it is equally important that the users
of the general purpose financial reports are able to compare various aspects of an entity over
different time period and with other entities. To be comparable, accounting reports must belong to
a common period and use common unit of measurement and format of reporting.

Qualitative Characteristics of Accounting Information

Decision Makers
(Users of Accounting Information)

Understandability

Decision Usefulness

Relevance
Reliability

Timeliness
Verifiability Faithfulness

Neutrality
Dedicative Feedback value
value
Comparability

Figure 2.2:-The qualitative characteristics of accounting information

2.2.3 Financial Report

Financial statements are means through which those in charge of the business entity report to
stakeholders information about the entity‟s financial position, financial performance, and cash
flows by providing information about its assets, liabilities, equity, income and expenses, other
changes in equity, and cash flows(Mirza and Halt, 2011).
Financial statements are generated by first organizing, and then analyzing numbers from the
business activities. Understanding financial statements is essential to the success of a small

14
business. They can be used as a roadmap to steer the business in the right direction and help to
avoid costly breakdowns.
According to Mirza and Halt, the various financial statements that together would be considered a
complete set of financial report include, Statement of Financial Position/ the balance sheet, the
Income Statement/Profit and Loss Statement, the Statement of Cash Flows, the Statement of
Changes in Owner‟s Equity/Worth and Accounting policies and notes to the Financial Statements
(Mintah Emmanuel Kofi, 2014).
After transactions have been recorded and summarized, reports are prepared for users. The
Accounting reports that provide this information are called financial statements. The principal of
financial statements are income statement, statement of owners‟ equity, balance sheet, and
statement of cash flow (Fees and warrn, 24th edition).
 Income statement: - the income statement reports the revenues and expenses for a period of
time, based on matching concept. This concept is applied by matching the expense with the
revenue generated during a period by those expenses. The income statement also reports
the excess of the revenue over the expense incurred. This excess of the revenue over the
expense is called net income or net profit. If the expense is exceed the revenue the excess is
net loss.
 Statements of owners‟ equity: - it reports the changes in the owners‟ equity for a period of
time.
 Balance sheet: - it is a list of assets, liabilities, and owners‟ equity as a specific date,
usually at the close of the last day of a month or a year.
 Statements of Cash flow:- is a summary of the cash receipts and cash payments for a
specific period of time, such as a month or a year.(Fees and Warren, 24th edition)
2.2.4 Preparation and Reporting of financial statements
The International Accounting Standards Board (IASB) In July 2009 issued the International
Financial Reporting Standards (IFRS) for the preparation and reporting of financial statements by
Small and Medium- Sized Entities (IFRS for SME‟s). This Standard provides an easy framework
that can be applied by small business entities in place of the full set of International Financial
Reporting Standards (IFRS) (Mirza& Holt, 2011). The standards are necessary for comparability
both with the entity‟s financial statements of previous periods and with those of other entities. In
view of this, the Small Businesses are required to follow the standards and guidelines of the IFRS
in the preparation of the financial statements.
2.2.5 The effects of failure to prepare financial reports on Small Scale Enterprise
No business can succeed in the long term without knowing exactly where its profits come from,
what its expenses are and how much it is making and spending --it needs financial statements. The
importance of good accounting records and financial statements to a small business cannot be over
emphasized. Keeping good accounting records and financial statements are even more important
for a small business than for other businesses (www.helium.com).

15
A small business usually has few assets. Any crisis will sink it because it has nothing to fall back
on. That is why proper bookkeeping and financial statements is a must for small businesses. Good
accounting records will ensure that the financial statements of the business are readily available
when required. (www.helium.com) a business‟ financial statements provide various financial
information that business owners and creditors use to evaluate the business financial performance.
Financial statements are also important to business managers because it helps them in running the
business (Way, 2007). But most small business or home-based-business entrepreneurs neglect any
sort of financial statement, believing that their businesses are too small to need it. Without
financial statements, decisions and daily activities of enterprises are based on guesses--not facts
and thereby lead to the collapse of the enterprise.

2.3 Research gap

As previously mentioned, small scale enterprises are a significant component of the economy and
there is a lack of empirical evidence along with the gap between the theory and the practice
considering their accounting and reporting practice and its effect in small scale enterprises in
Debre Markos town. Therefore, this study assessed small scale enterprises accounting and
reporting practice in Debre Markos town to provide empirical evidence of this gap.

16
 CHAPTER THREE

3. RESEARCH METHODOLOGY
3.1 Research design
In this study, the researchers were used both qualitative and quantitative data.

3.2 Type and source of data

In this study the researchers were used both primary and secondary data to achieve the objective of
the study. Primary data were collected from primary data and the secondary data were collected
from secondary data. The researchers‟ source of data were gathered from our respondents such as
manufacturing, construction, urban agriculture, trade and service provide sector were our source of
data.

3.3 Method of data collection

Both primary and secondary data collection were used during the study.to get relevant and full
information the two methods were used side by side. The primary data collection method were
questionnaires the researchers used both open end and closed end questionnaires, interview the
researchers used unstructured interview and observation method used to assess the actual operation
of the enterprise accounting. The secondary data were collected from publicly available sources.

3.4 Target population

There is 2298 small business enterprise in Debre Markos town. The target population includes 185
manufacturing sector, 62 construction sector, 56 urban agriculture sector, 1550 trade sector and
445 service provider sectors.

3.5 Sample size

To determine the sample size, Yaro Yamane‟s formula would use to determine actual sample size
for small business enterprise

n = N

1+N (e) 2

Where, N=population of the study

n=Sample size

e=error margin or level of significance

1=constant

Applying the formula for small business enterprise

17
 N= 2298

1+2298(0.1)2

N= 95.8 ~96

To know how many items are select from each sectors the researchers would follow the method of
proportion allocation under which the size of the sample from different sector are keep
proportional to size of enterprise.

No Strata Population Proportion Sample

1 Manufacturing sector 185 8 8

2 Construction sector 62 3 3

3 Urban agriculture sector 56 2 2

4 Trade sector 1550 67 65

5 Service provider sector 445 20 18

Total 2298 100 96

3.6 Sampling Technique

The sample technique for this study was judgmental sampling. The reasons for selecting this
technique were:-

-It was enable the researchers to select the respondent enterprise that fits for their questions.

-It was less time consuming as compared with other sampling technique

3.7 Data analysis and interpretation

After data collection further research producers like processing and analysis of collection data is
take editing can be using for the collecting data to detected errors, monitions and in necessary
questionnaire used in the field of editing techniques in the analysis. Finally collecting data is
analyzed by using different methods like tables, pi-charts, barographs and percentage, coding using
Numerical and classifying or organizing large volume data in to homogeneous groups.

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 CHAPTER FOUR

4. DATA ANLYSIS AND INTERPRTATION

4.1 Demographic Background
Table 4.1: - demographic background of the respondents

Frequency Percentage
<=8 grade 21 21.8%

Secondary cycle(9-12 grade) 34 35.4%

Education status
TVET/ diploma 28 29.1%
Degree and above 13 13.5%
Accounting 7 16.8%
Management 5 12%
Profession of the Economics 3 7.2%
respondent
Engineering 3 7.2%

Other 23 55.2%
2009E.c 12 12.5%
2008E.c 10 10.4%
Completion of the owners
2007E.c 18 19%
education
Before 2006E.c 56 58.24%

Trade 65 67.6%

Service provider 18 18.72%

Manufacturing 8 8.32%
Sector of SE‟s
Construction 3 3.12%

Urban Agriculture 2 2.08%

Less than 1 year 28 29.12%

Age of the SE‟s 1-3 years 36 37.4%

4 and greater than 4 years 32 33.3%

19
 1-5 employees 75 78%
6-10 employees 15 15.6%
Number of employee 11-20 employees 6 6.2%
Sole proprietor 75 78%

Legal status of SE‟s Partnership 12 12.5%

Private limited company 9 9.4%
Owners 90 93.6%
Management of SE‟s Employee manger 6 6.24%
Overall responsibility 70 72.8%
Roll of the managers in
SE‟s Administrative and finance 26 26.9%
Source: - own survey from SE‟s

The above table 4.1 indicates that, the researchers were interested in the level of education to
determine the skills, expertise and the Competence level of the respondents in answering the
questionnaire. Information gathered from the respondents indicated that majority of the
respondents had secondary cycle (9-12 grade) and TVET/diploma, 34(35.4%)and 28(29.1%)
respectively. 21(21.8%) of the respondents had less than grade eight, 13(13.5%) of the respondents
had degree and above. In addition, it was revealed that all small scale enterprise owners have at
least basic education. This implies that the respondents have capacity to answer the questions in
the questionnaire. Regarding to the professional background the results indicate that from
TVET/diploma, degree and above, the majority of the respondents 23(55.2%) had graduated in
other fields. Accounting, management, economics, and engineering, 7(16.8%), 5(12%), 3(7.2%),
3(7.2%) had graduated respectively. Regarding to the Completion of the Owners Education
12(12.5%) of the respondents are completed their education in 2009E.c, 10(10.4%) of the
respondents are completed their education in 2008E.c, 18(19%) of the respondents are completed
their education in 2007E.cand 56(58.24%) of the majority respondents are completed their
education before 2006E.c.Regarding to the Sector of the SE‟s 65(67.6%) of the respondents are
engaged in trade business,18(18.72%) of the respondents are engaged in service provider. Low
level of respondents engaged in urban agriculture, construction and manufacturing means that
there are very limited in number of this kind of SEs in the town and they are 2(2.08%), 3(3.12%),
8(8.32%) respectively. This implies that most of the SE‟s engaged in trade business. Regarding to
the age of the SE‟s 28(29.12%) of the respondents SE are the age of less than one year, 36(37.4%)
of the respondents SE are the age of one up to three years and 32(33.3%) of the respondents SE are
the age of four and greater than four years. This implies that most of the enterprise ages are one up

20
to three years. Regarding to number of employees 75(78%) have 1-5 employees, 15(15.6%) have
6-10 employees, 6(6.2%) have 11-20 employees. This implies that most enterprise have 1-5
employees. Regarding to legal statuses of SE‟s, the firms was analyzed in terms of whether they
are Sole proprietor, partnerships, and private limited company. 75(78%) of the respondents firms
are Sole proprietor. 12 (12.5%) of the respondents firms are partnership and 9(9.4%) of the
respondents firms are private limited company. This implies that most of the firms are sole
proprietor. Regarding to management of the SE‟s, firms can be managed by different individuals
such as; by owners and by employee.90(93.6%) of the respondents firms are owner-managed,
6(6.24%) of the respondents firms are managed by employee. This implies that most of firms are
managed by the owners. Finally regarding to the role of the manager in the firm is the main
determinant for the firm‟s success. The main role of the manager is categorized as; overall
responsibility, administrative and finance. 70(72.8%) of the respondents firms managers role is
overall responsibility. 26(26.9%) of the respondents firms managers responsible only in
administrative and finance. This implies that most of the SE‟s managers‟ main roles are the overall
responsibility of the firms.

4.2 Keeping Accounting Records

Table 4.2: Response on whether the firm maintains accounting records or not

1. Does the firm keeps accounting Records Frequency Percentage

records?
Yes 51 53

No 45 46.8
Total 96 100%
Sources: - own survey of SE
The above table indicates that 51(53%) of the respondents agreed that the firm keeps accounting
records and the remaining 45(46.8%) say “no”. This implies that the firm actually keeps the
accounting records

4.3 Reasons for Not Keeping Accounting Records

Table 4.3: Reasons why SEs does not keep accounting records

2. Why your enterprise Reasons Frequency Percentage

does not kept accounting It is time consuming 6 13.32%
records?
It is expensive 4 8.9%

It requires technical 12 26.6%

skills and knowledge

It requires more staffs 4 8.9%

21
 It makes the enterprise 5 11.1%
to pay more tax

There is no need to 6 13.32%

keep accounting
records

It is difficult to 8 17.8%
maintain the system

Total 45 100%

Source: own survey of SE‟s

The above table indicates that6(13.32%) of the Respondents agreed that It is time consuming,
4(8.9%) of the respondent agreed that It is expensive, 12(26.6%) of the respondent agreed that It
requires technical skills and knowledge, 4(8.9%) of the respondent agreed that It requires more
staffs,5(11,1%) of the respondent agreed that It makes the enterprise to pay more tax, 6(13.32%) of
the respondent agreed that There is no need to keep accounting records and 8(17.8%) of the
respondent agreed that It is difficult to maintain the system. This implies that SE‟s does not keep
accounting record because of it requires technical skills and knowledge.
4.4 Types of Accounting Records Being Kept and Maintained by SE’s
Table 4.4: Types of accounting records being kept and maintained by SEs

3.What type of Type of accounting Frequency Percentage

accounting record being record
kept and maintained by Balance sheet 22 43.14%
your enterprise
Statement of cash flow 5 9.8%

Income statement 9 17.65%

Statement of retained 15 29.41%

earning
Total 51 100%

Source:-own survey from SE‟s

The above table indicates that 22(43.14%) of the respondents agreed that the type of accounting
record being kept are balance sheet, 5(9.8%) of the respondents agreed that the type of accounting
record being kept are statement of cash flow, 9(17.65%) of the respondents agreed that the type of

22
accounting record being kept are income statement, 15(29.41%) of the respondents agreed that the
type of accounting record being kept are statement of retained earnings. This implies that the
accounting records being kept and maintained by SE‟s are balance sheet.

4.5 Motivation/Purpose for Maintaining Accounting Records

Table 4.5: Motivation/purpose for maintaining accounting records

4. What motives Motivation/purpose Frequency Percentage

others to maintain Taxation purpose 4 7.8%
accounting records?
Income distribution purpose 3 5.8%

Performance evaluation purpose 6 11.7%

Tracking of receivables and 31 60.8%
payables
For support in accessing 2 3.9%
credit/finance
To determine the size of business 5 9.8%

Total 51 100%

Source:-own survey from SE‟s

The above table indicates that 4(7.8%) of the respondents agreed that the motives of keeping
accounting records for taxation purpose,3(5.8%) of the respondents agreed that the motives of
keeping accounting records for income distribution purpose,6(11.7%) of the respondents agreed
that the motives of keeping accounting records for Performance evaluation purpose,31(60.8%) of
the respondents agreed that the motives of keeping accounting records for tracking of receivables
and payables,2(3.9%) of the respondents agreed that the motives of keeping accounting records for
support in accessing credit/finance and 5(9.8%)of the respondents agreed that the motives of
keeping accounting records to determine the size of business. This implies that the motives of accounting
records by SE‟s for tracking of receivables and payable.

4.6 Income statement

4.6.1 Income statement period

Table 4.6.1: income statement period

5. When your enterprises Period Frequency Percentage

prepare income statement? Monthly 5 55.5%
Quarterly 2 22.2%
Semiannually 1 11.1%
Annually 1 11.1%
Total 9 100%
Source:-own survey from SE‟s
23
The above table indicates that 5(55.5%) of the respondents agreed that the enterprise prepare
income statement monthly, 2(22.2%) of the respondents agreed that the enterprise prepare income
statement quarterly, 1(11.1%) of the respondents agreed that the enterprise prepare income
statement semiannually and 1(11.1%) of the respondents agreed that the enterprise prepare income
statement. This implies that the enterprises actually prepare income statement monthly.

4.6.2 Income Statement (statement of profit or loss on the enterprises)

Table4.6.2: statement of profit or loss on the enterprises

6. Is your income statement Option Frequency Percentage

always shows profit? Yes 24 47%

No 27 53%
Total 51 100%

Source:-own survey from SE‟s

The above table 4.6.2 indicates that 24(47%) of the respondents agreed that the SE‟s income
statement always shows profit and the remaining 27(53%) say “no”. This implies that the SE‟s
income statement always shows no profit (loss).

4.6.3 Option of small enterprises when there is no profit

Table 4.6.3: option of small enterprises when there is no profit

7. If your answer for Options Frequency Percentage

Q6 is “no”, what option Borrowing 8 29.6%
do the enterprise took? Change the enterprise 15 55.5%
Close the enterprise 4 14.8%
Total 27 100%
Source:-own survey from SE‟s
The above table 4.6.3 indicates that 8(29%) of the respondents agreed the enterprise took the
option borrowing, 15(55.5%) of the respondents agreed the enterprise took the option change the
enterprise and 4(14.8%) of the respondents took the option close the enterprise. This implies that
the enterprise actually took the option of change the enterprise.
4.7 Statement of balance sheet
4.7.1 Statement of balance sheet nature
Table 4.7.1: statement of balance sheet nature

8. Does the accounting equation form that Option Frequency Percentage

you prepare the statement of balance Yes 6 27.3%
sheet in your enterprise become always
equal? No 16 72.8%
Total 21 100%
Source:-own survey from SE‟s

24
The above table 4.7 indicates that 6(27.3%) of the respondent‟s agreed that balance sheet reports
asset, liability and owners‟ equity are equal and the remaining 16(72.8%) say “no”. This implies
that the accounting equation form that the enterprise prepare the statement of balance sheet in the
enterprise actually always not equal.

4.7.2 Statement of balance sheet period

Table 4.7.2: statement of balance sheet period

9. When the Period Frequency Percentage

enterprises prepare Monthly 16 72.8%
the balance sheet? Quarterly 3 13.7%
Semiannually 1 4.6%
Annually 2 9%
Total 22 100%
Source:-own survey from SE‟s

The above table 4.14.2 indicates that 16(72.8%) of the respondents agreed that the enterprise
prepare balance sheet monthly 3(13.7%) of the respondents agreed that the enterprise prepare
balance sheet quarterly, 1(4.6%) of the respondents agreed that the enterprise prepare balance sheet
semiannually, 2(9%) of the respondents agreed that the enterprise prepare balance sheet annually.
This implies that most enterprises prepare the balance sheet monthly.

4.8 Suggestions on How to Improve the Accounting Practices of SE’s

Table 4.8: -Suggestions on How to Improve the Accounting Practices of SE‟s

10. What could be Options Frequency Percentage

done to improve
Organize training for managers and 27 28%
the accounting
owners
practice of the
enterprises? Hire consultants for SE‟s for financial 9 9.36%
statement analysis
Make the use of accounting record 14 14.56%
mandatory
Offer free accounting service 12 12.48%
Motivate managers/owners to adopt 10 10.4%
accounting records
Strengthen monitoring and supervision 8 8.32%
Educate managers/owners on the need 16 16.64%
to keep accounting records
Total 96 100%
Source:-own survey from SE‟s

25
The above table 4.8 indicates that 27(28%) of the respondents agreed that to improve the
accounting practice organize training for managers and owners, 9(9.36%) of the respondents
agreed that to improve the accounting practice hire consultants for SE‟s for financial statement
analysis,14(14.56%) of the respondents agreed that to improve the accounting practice make the
use of accounting record mandatory, 12(12.48%) of the respondents agreed that to improve the
accounting practice offer free accounting service, 10(10.4%) of the respondents agreed that to
improve the accounting practice motivate managers/owners to adopt accounting records. 8(8.32%)
of the respondents agreed that to improve the accounting practice strengthen monitoring and
supervision and 16(16.64%) of the respondents agreed that to improve the accounting practice
educate managers/owners on the need to keep accounting records. This implies that to improve the
accounting records practice of SE‟s the concerned bureau should organize training for managers
and owners

4.9 Reports

4.9.1 Reports by small scale enterprises

Table 4.9.1: Response on whether the firm prepares reports or not

11. Does the firm prepare the Records Frequency Percentage

reports? Yes 15 29.4%
No 36 70.6%
Total 51 100%
Source:-own survey from SE‟s
The above table 4.9.1 indicates that 15(29.4%) of the respondents agreed that the firms prepare the
reports. And the remaining 36(70.6%) says “no”. This implies that the firm actually does not
prepare the reports.
4.9.2 Reports by small enterprise period
Table 4.9.2:- Period of report

12. When the Period Frequency Percentage

enterprises prepare Quarterly 10 66.6%
the reports? Semiannually 2 13.3%
Annually 3 20%
Total 15 100%
Source:-own survey from SE‟s
The above table 4.9.2 indicates that 10(66.6%) of the respondents agreed that the enterprises
prepare the reports quarterly, 2(13.3%) of the respondents agreed that the enterprise prepare the
reports semiannually, 3(20%) of the respondents agreed that the enterprise prepare the reports
annually. This implies that most enterprises prepare the reports quarterly.

26
4.9.3 The Address of the report
Table 4.9.3:- Address of the report

13.To whom did Address Frequency Percentage

the enterprise Tax office 2 13.3%
address the report Bank 1 6.7%
Stake holders 4 26.6%
Not reported 8 53.3%
Total 15 100%
Source:-own survey from SE‟s

The above table 4.9.3 indicates that 2(13.3) of the respondents agreed that the enterprise address
the reports to tax office, 1(6.7%) of the respondents agreed that the enterprises address the reports
to bank, 4(26.6&) of the respondents agreed that the enterprise address the reports to the stake
holder and 8(53.3%) of the respondents agreed that the enterprise does not address the reports.
This implies that after preparing reports most of the enterprises are not address the reports.
4.9.4 Reasons for not preparing reports
Table 4.9.4:- Reasons for not preparing reports

14. Why the Reasons Frequency Percentage

enterprise does It requires technical skills and 13 36%
not prepare the knowledge
report? It is time consuming 5 13.9%
It is expensive 1 2.8%
There is no need to prepare report 10 27.7%
It is difficult to maintain the system 3 8.3%
It makes the enterprise to pay more 4 11%
tax
Total 36 100%
Source:-own survey from SE‟s

The above table 4.9.4 indicates that 13(36%) of the respondents agreed that the reasons for not
preparing report are it requires technical skill and knowledge, 5(13.9%) of the respondents agreed
that the reasons for not preparing report are it is time consuming, 1(2.8%) of the respondents
agreed that the reasons for not preparing report are it is expensive, 10(27.7%) of the respondents
agreed that the reasons for not preparing report are there is no need to prepare the report, 3(8.3%)
of the respondents agreed that the reasons for not preparing report are it is difficult to maintain the
system, 4(11%) of the respondents agreed that the reasons for not preparing the report are it makes
the enterprise to pay more tax. This implies that the enterprise reasons for not preparing report are
it requires technical skill and knowledge.

27
4.10 Suggestions on How to improve the Reporting Practices of SE’s
Table4.10:-Suggestions on How to improve the Reporting Practices of SE‟s

15. What Options Frequency Percentage

could be Organize training for 34 35.36%
done to managers and owners
improve the Hire consultants for SE‟s 6 6.24%
reporting for report analysis
practice of Make the use of report 9 9.36%
the mandatory
enterprise? Offer free report preparation 14 14.56%
service
Motivate managers/owners 7 7.3%
to adopt reports
Strengthen monitoring and 10 10.4%
supervision
Educate managers/owners 16 16.64%
on the need of report
Total 96 100%
Source:-own survey from SE‟s
The above table 4.8 indicates that 34(35.36%) of the respondents agreed that to improve the
reporting practice organize training for managers and owners, 6(6.24%) of the respondents agreed
that to improve the reporting practice hire consultants for SE‟s for report analysis,9(9.36%) of the
respondents agreed that to improve the reporting practice make the use of report mandatory,
14(14.56%) of the respondents agreed that to improve the reporting practice offer free report
preparation service, 7(7.3%) of the respondents agreed that to improve the reporting practice
motivate managers/owners to adopt accounting records. 10(10.4%) of the respondents agreed that
strengthen monitoring and supervision and 16(16.64%) of the respondents agreed that to improve
the reporting practice educate managers/owners on the need of report. This implies that to improve
the reporting practice of SE‟s the concerned bureau should organize training for managers and
owners.

28
 CHAPTER FIVE
5. CONCLUSION AND RECOMMENDATION.
5.1 Conclusion
The study focused on the assessment of accounting and reporting practices of SE‟s in Debre
Markos Town. It aimed to investigate the types of accounting records being kept and maintained
by small enterprise, to analyze the purpose for maintain accounting records, to find out the reasons
for not keeping accounting records, to provide suggestions on how to improve the accounting
practice of the small enterprise. For this reason, it reviewed relevant literature and collected data
from the SE‟s as a sample.
This study shows that 46.8% of the respondent enterprises still are not properly used the
accounting practice. The reaming 53.2% of the respondents enterprise kept accounting records.
The types of accounting records being kept and maintained by small enterprises are income
statement, balance sheet, retained earnings and cash flow. Despite there have been small
enterprises which maintain income statement, cash flow, and statement of return earnings, the
majority enterprises maintain balance sheet. Therefore, the researchers conclude that most of the
SE‟s have maintained accounting records however, the remaining are still flow traditional way.
The purpose\motives to maintain accounting records on SE‟s are for taxation purpose, income
distribution purpose, for tracking of receivables and payables, performance evaluation purpose, for
support in accessing credit/finance and to determine the size of business. Most of the SE‟s
purpose\motives to maintain accounting records are for tracking of receivables and payables.
Therefore, the researchers conclude that the SE‟s purpose\motive to maintain accounting record for
tracking of receivables and payables.
The results reveal that SE‟s do not maintain proper books of accounts because owners\managers
find, it requires technical skills and knowledge which is lack of the necessary accounting
knowledge, it is difficult to maintain the system, it is time consuming, there is no need to keep
accounting records, blame the records would make their firm pay more tax, it is expensive, and it
requires more staffs. Most of the SE‟s do not maintain accounting record because of it require
technical skills and knowledge. Therefore, the researchers conclude that the SE‟s does not have
technical skill and knowledge to maintain proper accounting record.
The study shows that the suggestions on how to improve the accounting practice of the small
enterprise are organize training for managers and owners, hire consultants for SE‟s for financial
statement analysis, make the use of accounting record mandatory, offer free accounting service,
motivate managers/owners to adopt accounting records, strengthen monitoring and supervision,
educate managers/owners on the need to keep accounting records. Most of the SE‟s suggestion on
how to improve the accounting practice by Organize training for managers and owners. Therefore,
the researchers concluded that the SE‟s does not have maintained training on basic accounting
records.

29
5.2Recommendation
Based on the findings of the study, the following recommendations can be drawn.

 Encourage and continuous follow up for those enterprises who do keep proper accounting
record. Accounting training programs for SE‟s should be prepared by the responsible micro
and small enterprise bureau for those who do not keep proper accounting record or for
those who keep in traditional way. This strategy will help them to advance their accounting
practices and bring about the possibility of formalizing their operations.
 As a means of motivation, the bureau should design specific guidelines for SE‟s accounting
and provide templates for accounting practices of SE‟s. This strategy will reduce the
technicalities involved in maintaining accounting records and also make the whole process
very simple and friendlier.
 Provide awareness to the SE‟s about the essentiality of proper accounting records. Proper
accounting record is paramount in any business and that it is crucial in tracking all aspects
of the business from the information contained in the books – as in what is happening in the
business, how much has been sold, what the costs are, what activities are profitable,
whether selling prices leave a suitable margin against cost and so on.
 The bureau should put in place a regulatory body to ensure that SE‟s keep proper books
and prepare final accounts. To the extent that such information is required by business
owners and government, the necessary legal instruments and proper monitoring must be in
place to ensure compliance.

30
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2010.

Basu, A., Blavy, R. and Yulck, M. (2005) "Microfinance in Africa: Experience and
Lessons from Selected African Countries" IMF Working Paper 04/1 7 4,
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Ekpenyong, D. B. (1995) „Financing Small Enterprising In Nigeria: Sources, Constraints And

Prospect.‟............ (1997) „The Role of Institutions in Promoting Entrepreneurship and Small
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Small and Medium Enterprises Development: Policies, Programs and Prospects. West African
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Hallberg, K. (1999) „A Market Oriented Strategy for Small and Medium Scale Enterprises.‟ IFC
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Delivery Strategies in Nigeria.‟ CBN Economic and Financial Review, VoL 30,
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<http://www.czechinvest.org/definice-msp>

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Holmes, S. (1991). Small business financial management practices in North America: a literature
review, Journal of Small Business Management, 29(2), pp. 19-29.

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Oboh GAT 2002.Bank Participation in the Promotion of Small and Medium-Scale Enterprises.
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TafaMosisa, Accounting Practice of Small and Medium sized Enterprise and its Effect on Access
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Deresse M.L, Zerihun A.B,(2002). Accounting and reporting practice of micro and small
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Mittal, K.C. &Batra, G.S. (2004).Performance and growth of small scale industries in
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33
34
 APPENDICES

Appendix 1: (English Questionnaires)

DEBRE MARKOS UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF ACCOUNTING AND FINANCE

This questionnaire on the subject “Assessment of accounting and reporting practice of small
enterprises in DebreMarkos Town” has been designed purposely to source information on
accounting practice of the firms. The information supplied will be treated in utmost confidentiality
and use mainly for the purpose in which the study is intended (Only for academic purpose).
Your honest and objective answers to the following questions will be highly appreciated and
acknowledge. This is the question to be filled by the owner or the manager of the business. Please
answer the following question accordingly; by choosing best alternative for multiple choices. You
may have more than one choice depending on some questions.

35
1 What is the type of your business?

A, Service provider B, Urban agriculture C, Construction

D, Trade E, Manufacturing

2 How old is your business?

A, Below 1 year B, 1-3 years C, Above 4years

3 Ownership state?

A, Sole proprietor B, Partnership C. Private limited company

4 How much the number of employees?

A, One to Five B, Six to Ten C, Eleven to Twenty

D, above twenty

5 What is your academic background?

A, Illiterate B, Less than grade 8 C, Nine to twelve

D, TVET/Diploma E, Degree and above

6 If your answer for Q5 is TVET/Diploma or degree and above, what is your professional
background?

A, Accounting B, Management C, Economics D, Engineering E, other

7 When did you complete your education?

A, In 2009 B, In 2008 C, In 2007 D, Before 2006

8 What is your main role in the enterprise?

A, Manager B, Administrative and finance C, Some other responsibilities (mention it

here…………)

9 Who is the manager of your business?

A, The owner B, Employed manager

10 Does the firm keeps accounting records?

A, Yes B, No

36
11 If your answer for Q10 is “no”, why your enterprise do not do that?

A, It is time consuming B, It is expensive C, It requires technical skills and knowledge D, It

requires more staffs E, It makes the enterprise to pay more tax F, There is no need to keep
accounting records G, It is difficult to maintain the system

12 What type of accounting record being kept and maintained by your enterprise?

A, balance sheet B, statement of the problem C. income statement D, statement of retained

earnings

13 What motives others to maintain accounting record?

A, Taxation purpose B, Income distribution purpose C, Performance evaluation purpose D,

Tracking of receivable and payable E, Accessing credit /finance F, Determine the size of the
business

14 When you prepare the income statement on your enterprise?

A, Monthly B, Quarterly C, Semiannually D, Annually

15 Is your income statement shows always profit

A Yes B, No

16 If your answer for Q15 is “no”,what option do you take?

A, BorrowingB, Change the enterpriseC, Close the enterprise

17 Do the accounting equation form that you prepare the statement of balance sheet in your
enterprise become always equal?

A, Yes B, No

18 When you prepare the statement of balance sheet?

A, Monthly Quarterly C, Semiannually D, Annually

19 What could be done to improve the accounting practice of small enterprise?

A, Organize training for managers and owners B, Hire consultants for SMEs for financial
statement analysis C, Make the use of accounting record mandatory D, Offer free accounting
service

E, Motivate managers/owners to adopt accounting records F, Strengthen monitoring and

supervision G, Educate managers/owners on the need to keep accounting records
37
20 Does the firm prepare the report?

A Yes B, No

21 when you prepare the reports?

A, Quarterly B, Semiannually C, Annually

22 To whom did the enterprise address the report?

A, Tax office B, Bank C, Stakeholders D, not reported

23 Why the enterprise does not prepare the report?

A, It requires technical skills and knowledge B, It is time consuming C, It is expensive D, There is

no need to prepare report E, It is difficult to maintain the system F, It makes the enterprise to pay
more tax G, It requires more staffs

24 What could be done to improve the accounting practice of small enterprise?

A, Organize training for managers and owners B, Hire consultants for SE‟s for report analysis C,
Make the use of report mandatory D, Offer free preparation report service E, Motivate
managers/owners to adopt reports F, Strengthen monitoring and supervision G, Educate
managers/owners on the need of report

38
 Appendix 2: (Amharic Questionnaires)
ዯብረማርቆስዩኒቨርሲቲ
ቢዝነስ እና ኢኮኖሚክስ ትምህርት ክፍል
የአካውንቲንግ እና ፋይናንስ ዲፓርትመንት

ይህ መጠይቅ የአነስተኛ ኢንተርፕራይዝ የሂሳብ አሰራርና ሪፖርት ልምድ በዯብረማርቆስ ከተማ ላይ አተኩሮ የተዘጋጀ ሲሆን

አላማውም ከአነስተኛ ኢንተርፕራይዞች መረጃ ሇሂሳብ አያያዝና ሪፖርት ልምድ ላይ መሰብሰብ ነው፡፡ የሚሰጡን መረጃዎች

ሇትምህርት ዓላማዎች የሚውለ ናቸው፡፡ቀጥሎ ሇተዘረዘሩት ጥያቄዎች ታማኝ እና ቀልጣፋ መልስ መስጠት ስሇተባበሩን

ከልብ እናመሰግናሇን፡፡

ይህ ጥያቄ በኢንተርፕራይዙ ባሇቤት ወይም ስራ አስኪያጅ መሞላት አሇበት፡፡ እባክዎ የሚከተለትን ጥያቄዎች ይመልሱ፡፡ጥሩ

አማራጭ በመምረጥ እና ከእንድ በላይ መልስ ካሇዎት ሁሇት ወይም ከዚያ በላይ መምረጥ ይችላለ፡፡

39
 1. የተሰማሩበት የንግድ ዘርፍ?
ሀ. አገልግሎት በሰጪ ሇ. የከተማ በግብርና ሐ. ግንባታ መ. ንግድሠ. አምራች
2. በተሰማሩበትዘርፍሇምንያህልጊዜቆዩ?
ሀ .ከአንድ ዓመት በታች ሇ. ከ1-3 ዓመት ሐ. ከ4 ዓመትበላይ
3. ምን ያህል ሰራተኞች አለዎት?
ሀ. ከ1-5 ሇ.ከ6-10 ሐ.11-20 መ. ከ21 በላይ
4. የትምህርት ዯረጃዎ?
ሀ. ያልተማረ ሇ. ከ8ተኛ ክፍልበላይ ሐ. ከ9-12ኛ ያጠናቀቀ መ. ቴክኒክናሙያ/ዲፕሎማ ሠ. ዲግሪናከዚያበላይ
5. የ4ኛ ጥያቄ መልስዎ ቴክኒክናሙያ/ዲፕሎማ፣ዲግሪና ባላይ ከሆነ የተመረቁበት የትምህርትአይነት ?
ሀ. አካውንቲንግ ሇ. ማነጅመንት ሐ. ኢኮኖሚክስ መ. ኢንጂነሪንግሠ.ሌላ
6. ትምህርትዎን መቼ አጠናቀቁ?
ሀ. በ2009ዓ/ምሇ.በ2008ዓ/ም ሐ.በ2007ዓ/ም መ. ከ2006ዓ/ምበፊት

7. ዋና የስራ ድርሻዎ በኢንተርፕራይዙ ውስጥ ምንድን ነው?

ሀ. ስራአስኪያጅ ሇ. አስተዳዯርናገንዘብያዥሐ.ሌላሃላፊነትከሆነይጥቀሱ------------------------------------------------
------

8. የባሇቤትነት መብት?

ሀ. ሃላፊነቱ የተወሰነ የግል ማህበር ሇ. ሽርክና ሐ. አክሲዮን

9. የኢንተርፕራይዙ ስራ አስኪያጅ ማንነው?

ሀ. እርስዎ ሇ. ተቀጣሪ

10. ኢንተርፕራይዙ የሂሳብ አያያዝ ምዝገባ አሇዉ

ሀ. አዎ ሇ. የሇም

11 መልስዎ ሇ10 ጥያቄ የሇም ከሆነ ምክንያቱ ምንድን ነዉ

ሀ.ጊዜ ስሇሚወስድ ሇ. ውድ ስሇሆነ ሐ. ሇሙያው የሰሇጠነና እውቀት ያሇው ሰው ስሇሚያስፈልግ መ. የሰራተኛ ቁጥር
ስሇሚጨምር ሠ. ኢንተርፕራይዝዎን ብዙ ግብር ስሇሚያስከፍልዎ ረ. ጥቅም ስሇሌሇው ሰ. ሇመተግበር ከባድስሇሆነ

12 ምን አይነት የሂሳብ አያያዝ ሂዯት ይጠቀማለ

ሀ. ወጪና ገቢ ሂሳብ መመዝገቢያ (balance sheet) ሇ.የገንዘብ ፍስት መግሇጫ (statement of cash flow)

ሐ. የገቢሪፖርት(incame statement) መ. የተገኘ ትርፍ ከፍፍል መመዝግብ(statement retained earnings)

13. የሂሳብ መዝገብ አያያዝን እንዲመዘግቡ ያነሳሳዎተ ሌላ ምክንያት ?

40
ሀ. ግብር ሇ. ትርፍክፍፍልሐ. ኢንተርፕራይዙያሇበትንየአፈጻጸምዯረጃሇመሇየት

መ. ገቢናወጪንሇመሇየትሠ. ሇብድርአገልግሎትሇመጠቀም

ረ. ኢንተርፕራይዙ ያሇበትን የሃብት መጠን ሇመሇየት

14. የሂሳብ አያያዙን ሇማሻሻል /ሇማሳዯግ ምን ቢዯረግ ይሻላል ብሇው ያስባለ?

ሀ. ስልጠና ሇስራ አስኪያጅና ኢንተርፕራይዝ ባሇቤቶች ቢዘጋጅ

ሇ. ሇጥቃቅን ኢንተርፕራይዞች ሂሳባቸውን የሚያይ /የሚያገናዝብ ቢቀጠር

ሐ. የሂሳብ መዝገብ መያዝ ግዴታ ቢሆን

መ. ነጻ የሂሳብ መዝገብ አያያዝ አገልግሎት ቢሰጥ

ሠ. ማናጀሮች /ኢንተርፕራይዝ ባሇቤቶችን ማበረታታት ሂሳብ መዝገብን እንዲጠቀሙ

ረ . ጠንካራ የሆነ ቁጥጥርና ዳሰሳ ቢኖር

ሰ. ማናጀር/ኢንተርፕራይዝ ባሇቤቶችን በሂሳብ መዝገብ አያያዝ ጥቅም ማስተማር

15.ኢንተርፕራይዝዎ ሪፖርት ያዘጋጃል?

ሀ. አዎ ሇ. የሇም

16. ሇ15 ኛው ጥያቄ መልስዎ አዎ ከሆነ ሇምን ያህል ጊዜ ያዘጋጃለ?

ሀ. በ3 ወር ሇ.በ6 ወር ሐ.በዓመት

17. ያዘጋጁትን ሪፖርት ሇማን ሪፖርት ያዯርጋለ?

ሀ. ሇግብርቢሮ ሇ. ሇባንክ ሐ. ሇባሇድርሻአካላት መ. ሇማንምሪፖርትአላዯርግም

18. መልስዎ ሇ15 ኛውጥያቄየሇምከሆነምክንያቱምንድንነው?

ሀ. በሙያው የሰሇጠነና እውቀት ያሇው ሰው ስሇሚያስፈልግ

ሇ.ጊዜ ስሇሚወስድ ሐ. ውድ ስሇሆነ መ. ሪፖርት ማዘጋጀት ጥቅም ስሇሌሇው

ሠ. ሇመተግበር ከባድ ስሇሆነ ረ. ኢንተርፕራይዙን ብዙ ግብርስሇሚያስከፍሇው

ሰ. የሰራተኛ ቁጥር ሰሇሚጨምር

19. ሪፖርት ሂዯቱን ሇማሻሻል ምን ቢዯረግ ይሻላል ብሇው ያስባለ?

ሀ. ስልጠና ሇማናጀር/ሇኢንተርፕራይዝ ባሇቤቶች ቢሰጥ

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 ሇ. ሇጥቃቅን ኢንተርፕራይዞች ሪፖርት የሚያይ/የሚገነዘብ ቢቀጠር

ሐ. ሪፖርት ማቅረብ ግዴታ ቢሆን

መ. ነጻ የሪፖርት አሰራር እና ሪፖርት አዯራረግ አገልግሎት ቢሰጥ

ሠ. ማናጀር /ባሇቤቶችንማበረታታትሪፖርትእንዲያዯርጉ

ረ. ጠንካራ የሆነ ቁጥጥርና ዳሰሳ ቢኖር

ሰ. ማናጀር/የኢንተርፕራይዝ ባሇቤቶችን በሪፖርት ጥቅም ላይ ማስተማር

20. በምን ያህል ጊዜ ውስጥ የገቢ ሪፖርት ይመዘግባለ/ያዘጋጃለ?

ሀ. በወር ሇ. በ3 ወር ሐ.በ6 ወር መ.በአመት

21. ገቢው ሁልጊዜም ትርፍ ያሳያል?

ሀ. አዎ ሇ. አያሳይም

22. ሇ21 ኛው ጥያቄ መልስዎ አያሳይም ከሆነ ምን አይነት አማራጭ ይጠቀማለ?

ሀ. ብድር ሇ. የተሰማሩበትን ዘርፍ መቀየር ሐ. የተሰማራበትን ዘርፍ መዝጋት

23. በኢንተርፕራይዙ የሚዘጋጀው ወጭናገቢ ሂሳብ መመዝገቢያ ሁልጊዜ እኩልነው?

ሀ. አዎ ሇ. አይዯሇም

24. በምን ያህል ጊዜ ውስጥ ወጪና ገቢ ሂሳብ መመዝገቢ ያያዘጋጃለ?

ሀ. በወር ሇ. በ3 ወር ሐ.በ6 ወ መ.በአመት

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