IMPORTANCE OF BOOK KEEPING AND OTHER FINANCIAL STATEMENTS IN AN ORGANIZATION

HAPTER ONE
INTRODUCTION
1.1 Background to the Study
Accounting standards are needed so that financial statements will be fairly and consistently describe as a financial performance. Without standards, users of financial statements would need to learn the accounting rules of each company, and comparisons between companies would be difficult. While keeping track of your business’s finances may seem overwhelming, it’s not that hard when you know the bases of accounting and bookkeeping. Bookkeeping and accounting share two basic goals:
1. To keep track of your income and expenses this would improve your chances of making profit.
2. To collect the financial information necessary for filling your various tax returns. This sound pretty simple, it can be, especially if you remind yourself of these two goals whenever you feel overwhelmed by the details of keeping your financial records Wang, Hartmann, Gibbs &Cauley, (2009).
There is no requirement that your records be kept in any particular way. As long as your records accurately reflect your business’s income and expenses, the IFRS will find them acceptable. The actual process of keeping accounting books is easy to understand when broken down into three steps.
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i. Keep receipts or other acceptable records of every payment to and every expenditure by your business.
ii. Summarize your income and expenditure records on some periodic basis (daily, weekly, or monthly)
iii. Use your summaries to create financial reports that will tell you specific information about your business, such as how much monthly profit you are making or how much your business is worth at a specific point in time.
Whether these are done by hand on ledger sheets or use accounting software, these principles are exactly the same.
1.2 Statement of the Problem
It has been ascertained that most business enterprises fail to keep proper books of account and also fail to observe basic accounting procedures. As a result, they are not able to portray the exact financial position of their businesses. This tends to impede the ability of the enterprise to obtain the much needed loans from the financial institutions and other sources for expansion and diversification. The financial statements, such as the profit and loss accounts, the balance sheet and the cash flow statement of business enterprises cannot easily be prepared. Under such circumstances, annual profits cannot readily be determined.
The main research problem in this work is to account for the reason behind their inability to keep proper accounting records. It is important to state that the absence of proper records does not only impair the growth of the business enterprise but also, as stated earlier, reduces their chances of obtaining credit facilities from the financial institutions and other fund lenders. It is obvious that a cash starved business enterprise is bound to encounter difficulties in its attempt to expand and/or diversify its operation.
1.3 Objectives of the Study
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The objectives of this research were to consider the following:
1. To examine the importance of proper bookkeeping and basic accounting procedures in business enterprises.
2. To determine the extent to which bookkeeping and basic accounting procedures have been implemented and applied in business enterprise.
1.4 Research Question
1. What is the importance of basic bookkeeping to hotel business?
2. What is the basic accounting procedures applied in hotel business?
3. To what extent has accounting procedures been applied in hotel business?
1.5 Research Hypothesis
Hypothesis one
Ho: There is no significant impact of preparation of booking on the performance of Soltrag and Destiny Hotel, Agbara.
Hi: There is significant impact of preparation of booking on the performance of Soltrag and Destiny Hotel, Agbara
Hypothesis two
Ho: Hotel business does not apply basic accounting procedures in their daily financial activities.
Hi:Hotel businesses applies basic accounting procedures in their daily financial activities.
Hypothesis three
Ho: Accounting procedures has not been fully adopted by hotel business.
Hi: Accounting procedures has been fully adopted by hotel business.
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1.6 Significance of the Study
The significance of this study was to create through documentation, an awareness of the importance of bookkeeping and basic accounting procedures to business enterprises.
This study will also be of great significance to policy analysts since it will assist in analyzing the effectiveness and success of the work of the National Board for Business Industries (NBBI). The National Board for Business Industries was established with the prime objective of providing an umbrella institution that would address SSEs their financial operation/technical and documentary problems so as to enhance their opportunities to grow.
It will therefore equally be of immense help to the National Board for Business Industries, in evaluating the success of its activities with specific reference to the problem of poor bookkeeping and basic accounting procedures in such industries. It would also assist the boards in determining or formulating their future plans.
It will be of use to the student, the existing and prospective entrepreneur as well as any interested party.
It will assist students in their knowledge build-up and appreciation of the practical accounting situation of the SSE.
It will assist the entrepreneur in elucidating one of the prime causes of the failure of business enterprises
1.7 The Scope of the Study
Conceptually the study hovers around the implicit role proper basic bookkeeping and accounting procedures play as far as SSEs were concern. The activities of the regulating body National Board for
Small Scale Industries were considered alongside with SSEs’ keeping basic bookkeeping records and using basic accounting procedures.
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1.8 Definition of Terms
Accounting procedure: The method used in order to analyze and summarize financial data before it is transferred to the financial statement sheet.
Sales day book: A book in which non-cash sales are recorded with details of customer, invoice, and date, this details are later posted to each customer’s account in sales ledger.
Sales ledger: Subsidiary ledger to which debts and credit from a sales journal are transferred.
Business:Its an organization or enterprising entity engaged in commercial, industrial or professional activities.
Transaction: Its an agreement between a buyer and seller to exchange goods, services or financial instruments.
Records: It’s a document that memorializes and provides objectives evidence of activities performed, events occurred, result achieved or statement made.
Payments: It’s a transfer of an item or value form one party to another in exchange for the provision of goods, services or both, or to fulfill a legal obligation.
Liability:Debt which is owned by the company for goods and services supplied which are not liquidated at the time of preparing the balance.
Asset: Anything which is acquired by the business entity either for long-term us within the company for the generation of income or for short term for the purpose of conversion into cash within a year.
Profit: The excess of the selling price over all cost expenses incurred in marketing sale.
1.9 Organization of the Study
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The research project covered five chapters. Chapter 1 was about the introduction of the ;study, the statement of the research problem, research objectives and research questions of the study and the scope of the study. Chapters 2 dealt with the literature review and provide information on the areas of study Chapter 3 showed how the research work was designed. It further indicates the method of sampling of questionnaire, data collection & analysis of data. Chapter 4 was devoted to research findings of the field of study. Chapter 5 presented the summary of findings and conclusions to the study. There were also recommendations to help the SSEs to appreciate the need for effective basic bookkeeping and accounting procedures to grow hotel businesses.