Knowledge Of Accounting System As Effective Tools In The Decision Making Of Micro Enterprises

1498 words - 6 pages

Recently, on July of year 2009, the International Accounting Standards’ Board (IASB) released the International Financial Reporting Standards for Small and Medium-Sized Entities (IFRS for SMEs) .
Micro, small and medium enterprises (MSMEs) encompass 99.6% of all registered business in the country and occupy 70% of the labor force (Department of Trade and Industry [DTI], 2010). This makes them an essential unit in the economical aspect of the country. Also, according to DTI, their major role entails the assistance for rural industrialization and growth, and creation of employment prospects and more reasonable returns allocation. MSME’s further contribute much idea, ability, and advancement ...view middle of the document...

This study primarily aims to introduce the knowledge of accounting systems as an effective skill for owners of micro enterprises to aid them in making decisions. This emphasizes the incorporation of accounting system and/or other relative way of keeping records for entrepreneurs to utilize these records as bases for future transactions. This would also attest the accounting tool that is most relevant to small business owners. Primary reasons for incorporating these tools of recording can also be identified. The study would try to disprove that using accounting tools are merely for larger businesses with greater number of transactions for they might require higher amount of expenses allocated for using these tools.
The researchers conducted a survey last February 10, 2014 at De La Salle Lipa. Out of the owners and/or staffs of small businesses at Chez Rafael, BB Canteen and Food Palace located at the said school, 20 respondents were chosen randomly. This was done to gather first hand information about how accounting tools aid small businesses in their daily transactions and decision making. The survey was composed of two parts, the first for the demographic profile of the respondents and the second, with six questions, for the assessment of the research objectives. The following data were gathered.
Graph 1. Nature of Business

From the respondents, 15 of them or 75% were engaged in food business. Three out of 20, which led to 15%, had loading business while two of the respondents were selling school supplies which led to 10%. The results showed that most businesses operating inside the school were food businesses. Students and even teachers display great demand in food consumption. Their demand for this basic need makes the operation of the stalls harder to manage. This may then lead to disorder of records as transactions occur.
Graph 2. Number of Employees

Graph 2 showed that 80% or 16 of the respondents employed one to three people for the operation of the business. Two respondents said they have four to six employees and another two claimed that they have seven to nine employees. Both categories garnered 10%. Since most business owners employed one to three individuals to aid them in managing their transactions, this implied that most proprietors lessen the cost of operations through acquiring few staffs. These staffs are possibly seen enough to aid the owner in selling and recording the transactions, if necessary.
Graph 3. Educational Attainment

Graph 3 showed that among the respondents, 13 were high school graduates, 7 were able to finish college and none of them merely reached until elementary level. This indicated 65%, 35% and 0% respectively. This explained that even most respondents were able to reach high school level, they learned to manage businesses as owners or staffs. This disallowed questioning their knowledge in administering business records and the business itself despite their educational attainment.

Find Another Essay On Knowledge of Accounting System as Effective Tools in the Decision-Making of Micro Enterprises

Decision-Making Tools for Mangers Essay

1281 words - 5 pages successfully to make decisions in business.There is also a downside to each of these decision making tools. Some disadvantages of cost- benefit analysis are that it does not take distribution into account, and it does not factor in non-monetary benefits. Although PMI analysis is a good and effective technique to use to weigh thepositives, negatives, and neutrals of decisions; finding the results is time consuming, and it is not the most cost-efficient

Decision Making Tools And Techniques Essay

1296 words - 6 pages outweigh possible losses" (Decision making skills and techniques, 2006). Dr. Hossein supposes there are two diverse types of models that can be used for decision-making: deterministic models and probabilistic models. Deterministic models evaluate a high-quality decision by results alone, whereas probabilistic models demonstrate trepidation for the results assessment as well as the total consequence involved in the decision-making. Because the makers of

Management Abount Decision Making. As Managers and Entrepreneurs, We Should Have Confidence in our Decisions, But Can We? Discuss With Regard to Your Ability as a Decision Maker and the Tools and...

2118 words - 8 pages A decision is means that make choice of two or more alternatives (Robbins, Bergman, Stagg & Coulter, 2006, p. 208). And it is the point at which a choice is made between alternative and usually competing- options (Fitzgerald, 2002, p. 8). Everyone would make any decision in their life time when they want to choose any ideas from alternatives, such as: to spend 3 dollars for coffee or 3.5 dollars for juice. Although it is very small things in

Decision Making Tools & Techniques- Brainstorming

695 words - 3 pages Tools and Techniques PaperWhen faced with a difficult situation there are several decision-making tools or techniques that one can employ, brainstorming is one of them. Brainstorming is a powerful technique that breaks through narrow thinking by tapping into ones creativity, calling on every viable, however random, solution imaginable. This helps generate radical ideas and can lead to remarkable results. In order to find the best solution it is

Decision-Making Tools and Techniques

873 words - 3 pages One of the key roles of being a manager or potential manager is solving problems and making decisions. Do you do it alone? Do you involve others? Do you let others make the decisions? "Decision making is the study of identifying and choosing alternatives based on the values and preferences of the decision maker. Making a decision implies that there are alternative choices to be considered, and in such a case we want not only to identify as many

Capital Budgeting Decision-Making Tools

2645 words - 11 pages gives the highest NPV.Capital Budgeting is an extremely important aspect of a firm's financial management. Although capital assets usually comprise a smaller percentage of a firm's total assets than do current assets, capital assets are long-term. Therefore, a firm that makes a mistake in its capital budgeting process has to live with that mistake for a long period of time. Decision making tools for capital budgeting are essential for any

Highlight The Main Advantages And Disadvantages Of Individual Versus Group Decision Making. Discuss The Main Factors Affecting Decision-making Processes In Organisations. How Can Managers Ensure...

3831 words - 15 pages Highlight the main advantages and disadvantages of individual versus group decision making. Discuss the main factors affecting decision-making processes in organisations. How can managers ensure effective decision-making? January 2001, Word Count: 3113.¡§Decision making is the process of making a choice between alternatives¡¨ Rollinson (1998).Decision-making is almost universally defined as choosing between alternatives

Effective Decision Making

2080 words - 8 pages . Communication in this field is very important and is subjected to a number of barriers. Decision-making requires effective interpersonal communication taking place in healthcare organizations to increase efficiency and effectiveness, as well as quality of care. Effective Communication Effective communication is imperative for the success in the healthcare field. It has been proven that patient satisfaction and compliance with treatment and the

Effective leadership, ethics in decision making, and the systems approach

1138 words - 5 pages , ethics in decision making, and the systems approach. Effective Leader in a Learning Organization The leader within the learning organization must be able to make distinctions between their authority and the need for learning (Laurie & Heifetz, 2003). The leaders in the organization must be able to make adaptations and admit they do not know all of the answers, but instead are willing to work with the other employees or members of the organization

Decision Making Techniques in Managerial Accounting

1099 words - 4 pages choice and step seven is when the final decision is put into practice. Last, the final most important step is to regroup and review the decision and how it affected the problem (Bauer & Erdogan, 2010). When making decisions it is imperative that the prime decision maker keeps in mind various traps that will hinder the entire process. These barriers can cloud judgment, completely delay the process of giving a final verdict, or can serve as a

Ethics in Accounting and Financial Decision Making

586 words - 2 pages decision making process are in a stronger position in today's economy. These organizations will gain a good reputation for being ethical and attract new customers, staff, as well as new investors. All these benefits will contribute to the financial status of the organization and failure to do so will lead to poor financial performance. Organizations are turning to newer measurements that assess measured success factors, which should provide an accurate indication of performance.ReferencesAlbrecht, W.S, Stice, J.D., Stice, E.K., Swain, M.R., (2005), Accounting: Concepts and Applications (9th ed.), South-Western

Similar Essays

Financial Accounting: Tools For Business Decision Making Financial And Managerial Accounting: The Basis For Business Decisions

857 words - 3 pages result in cash payments or cash receipts during the current accounting period" (p. 390). Impaired assets are one of these noncash investing activities. The impaired assets were not sold and cash transaction did not occur that had an immediate effect on cash flows, therefore, it is considered a noncash expense.ReferencesKimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2007). Financial accounting: Tools for business decision making (4th ed

Law And Morality. Speaks Of The Dilemma Of Making A Decision That Someone Must Die In Order For The Others To Survive. Explains And Justifies The Decision By Using Legal Tools Such As Law And Moralit

2117 words - 8 pages the situation without examining it with knowledge of law and morality, the Meta Rule, and the doctrine of necessity would make it even more difficult to find a rational reason why one of the five people in the bunker should die, let alone justify it. Law and morality illustrated how sensitive a situation such as this can be, and how difficult it is to make a pure legal decision when morals are a large part of everyone's lives. The Meta Rule showed

Decision Making Tools Essay

991 words - 4 pages best. (Langdon, 2006)Cost benefit analysis is a relatively simple technique that is used when making a decision. This widely used technique is usually most effective when used as a tool aiding decision making, when contemplating a change. As its name implements; it is the process of adding the value of the benefits of a course of action, and subtracting the costs associated with it. (Mindtools, 2007)The cost-benefit analysis can be put in force when

Decision Making In Managerial Accounting Essay

2668 words - 11 pages number of managers within the firm. They employ tools such as the trend and ratio analyzes. This technique is used by many management accountants. Real-Life Application of Managerial Accounting Techniques within Businesses Managerial accountants are expected to apply the various management accounting techniques in their daily activities within the organization. Below is an evaluation of the techniques of capital investment decision technique of