1
COST ACCOUNTING SKILLS NEEDS OF SMALL
BUSINESS OPERATORS IN ANAMBRA STATE
By
UMEJI, ANTHONIA UJU
PG/M.Ed/Ph.D/09/51835
DEPARTMENT OF VOCATIONAL TEACHER EDUCATION
(BUSINESS EDUCATION)
UNIVERSITY OF NIGERIA, NSUKKA
MAY, 2013
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TITLE PAGE
COST ACCOUNTING SKILLS NEEDS OF SMALL BUSINESS
OPERATORS IN ANAMBRA STATE
A THESIS SUMBITTED TO THE DEPARTMENT OF VOCATIONAL
TEACHER EDUCATION, UNIVERSITY OF NIGERIA, NSUKKA
IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR
THE AWARD OF MASTERS
(M.ED) DEGREE IN BUSINESS EDUCATION
By
UMEJI, ANTHONIA UJU
PG/M.Ed/Ph.D/09/51835
MAY, 2013
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APPROVAL PAGE
THIS THESIS HAS BEEN APPROVED FOR THE DEPARTMENT OF
VOCATIONAL TEACHER EDUCATION, FACULTY OF EDUCATION,
UNIVERSITY OF NIGERIA, NSUKKA.
BY
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-------------------------
Prof. Mrs. C.A Obi
(Supervisor)
(Internal Examiner)
--------------------------
-------------------------
(External Examiner)
Prof. Mrs. C.A Obi
(Head of Department)
--------------------------Prof. I. Ifelunni
Dean of Faculty
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CERTIFICATION
Umeji, Anthonia Uju a postgraduate student in the Department of Vocational Teacher
Education, with registration number PG/M.ED/Ph.D/09/51835 has satisfactorily
completed the requirements for the Award of Masters Degree in Business Education. The
work embodied in this project is original and has not been submitted in part or full for
any other diploma or Degree of this or any other University.
………………...........……
Umeji, Anthonia Uju
(Student)
……….............…………
Prof. Mrs. C.A Obi
(Supervisor)
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DEDICATION
This work is dedicated to my darling husband and my lovely children.
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ACKNOWLEDGEMENTS
The researcher’s profound gratitude goes first to Almighty God for his mercies
and compassion throughout the period of this research work. The researcher is mostly
indebted to her erudite supervisor Prof. C. A. Obi for the immeasurable encouragements,
care, concerns and contributions towards the timely and successful completion of this
work. Mummy, you are worthy of my unreserved appreciation.
My gratitude also goes to the lecturers in Business education Units of the
Department of Vocational Teacher Education for their cares and contributions which
culminated to the successful completion of this research work. The significant roles
played by my readers particularly Dr. E. O Ugwoke is worthy of note. The researcher is
also thankful to the validates of the research instrument. Their suggestions and
contributions are very helpful to the successful completion of this research work.
The understanding of the researcher’s husband, his care and concern has imparted
greatly to the success of this work. To my beloved kids, I also appreciate their little care
and concern during the period of this study. The researcher jealously appreciates the
inestimable support of her parents Chief (Late) and Mrs Godwin Umeji for their supports
and encouragements from the very beginning of her academic pursuit.
The acknowledgement of this nature cannot be complete without thanking the
various authors and writers whose books were consulted and used for the successful
completion of this research work. All those who have contributed in various ways
towards the success of this research work and whose names were not mentioned are also
highly appreciated.
UMEJI, ANTHONIA UJU
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TABLE OF CONTENTS
Title Page
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Approval Page
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Certification --
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Dedication
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Acknowledgments --
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Table of Contents
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List of Tables
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Abstract
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CHAPTER ONE: INTRODUCTION --
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Background of the Study
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Statement of the Problem --
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Purpose of the Study
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Significance of the Study --
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Research Questions --
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Hypotheses --
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Delimitation of the Study --
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CHAPTER TWO: REVIEW OF LITERATURE --
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Conceptual Framework --
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Small Business --
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Cost Accounting
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Record keeping
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Inventory control --
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Inventory Valuation --
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Price Determination --
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Theoretical Framework --
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Going Concern Theory
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Entity Theory --
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Summary of Reviewed Literature
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CHAPTER THREE: METHODOLOGY
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Design of the Study --
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Area of the Study
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Population of the Study
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Sample for the Study
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Instrument for Data Collection
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Validation of Instrument
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Reliability of the Instrument
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Method of Data Collection --
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Method of Data Analysis
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CHAPTER IV: PRESENTATION AND ANALYSIS OF DATA --
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Research Question 1 --
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Research Question 2 --
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Research Question 3 --
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Research Question 4 --
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Testing of Hypotheses
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Findings of the Study
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Discussion of Research Findings --
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CHAPTER V: SUMMARY, CONCLUSION AND RECOMMENDATION --
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Restatement of the Problem
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Purpose of the Study
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Summary of the Procedure used for the Study
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Major Findings of the Study
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Related Empirical Studies
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Implications for Business Education
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Conclusions --
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Recommendations --
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Suggestions for Further Research --
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REFERENCES
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Appendix A: Letter to the Respondents --
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Appendix B: Instrument for Data Collection
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Appendix C: Result of Reliability Test --
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Appendix D: Result of Data Analyzed
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LIST OF TABLES
Table 1: Correlated t-test of Respondents’ Mean Ratings
on perceived importance and expressed possession of
record-keeping skills ----- -- -- --
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Table 2: Correlated t-test of Respondents’ Mean Ratings
on perceived importance and expressed possession of
Inventory control skills -- -- -- -- -- -- -- --
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Table 3: Correlated t-test of Respondents’ Mean Ratings
on perceived importance and expressed possession of
inventory valuation skills
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Table 4: Correlated t-test of Respondents’ Mean Ratings
on perceived importance and expressed possession of
price determination skills -- -- -- -- -- -- --
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Table 5: Analysis of Variance (ANOVA) of the Mean Ratings
of the Respondents’ perceived importance and
expressed possession of record-keeping skills
according to age -- -- -- --- -- -- -- -- --
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Table 6: Analysis of Variance (ANOVA) of the Mean Ratings
of the Respondents’ perceived importance and
expressed possession of inventory control skills
according to age -- -- -- -- -- -- -- -- -- -- --
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Table 7: Analysis of Variance (ANOVA) of the Mean Ratings
of the Respondents’ perceived importance and
expressed possession of inventory valuation skills
according to age -- -- -- -- -- -- -- -- -- -- -- --
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Table 8: Analysis of Variance (ANOVA) of the Mean Ratings
of the Respondents’ perceived importance and
expressed possession of price determination skills
according to age -- -- -- -- -- -- -- -- -- -- -- -- --
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Table 9: Analysis of Variance (ANOVA) of the Mean Ratings
of the Respondents’ perceived importance and
expressed possession of record-keeping skills
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according to years of experience -- -- -- -- -- --
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Table 10: Analysis of Variance (ANOVA) of the Mean Ratings
of the Respondents’ perceived importance and
expressed possession of inventory control skills
according to years of experience -- -- -- ---
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Table 11: Analysis of Variance (ANOVA) of the Mean Ratings
of the Respondents’ perceived importance and
expressed possession of inventory valuation skills
according to years of experience -- -- -- -- --
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Table 12: Analysis of Variance (ANOVA) of the Mean Ratings
of the Respondents’ perceived importance and
expressed possession of price determination skills
according to years of experience -- -- -- -- --
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Table 13: Analysis of Variance (ANOVA) of the Mean Ratings
of the Respondents’ perceived importance and
expressed possession of record-keeping skills
according to qualification-- -- -- -- -- -- -- -- --
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Table 14: Analysis of Variance (ANOVA) of the Mean Ratings
of the Respondents’ perceived importance and
expressed possession of inventory control skills
according to qualification -- -- -- -- -- -- -- --
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Table 15: Analysis of Variance (ANOVA) of the Mean Ratings
of the Respondents’ perceived importance and
expressed possession of inventory valuation skills
according to qualification-- -- -- -- -- -- -- -- - 124
Table 16: Analysis of Variance (ANOVA) of the Mean Ratings
of the Respondents’ perceived importance and
expressed possession of price determination skills
according to qualification -- -- -- --- -- -- -- --
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Table 17: The t-test of the Mean Ratings of rural and urban
Respondents on the perceived importance and
expressed possession of price determination skills -- - 128
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LIST OF FIGURE
Figure 1: Schematic Representation of the Conceptual Framework --
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Abstract
The study determined the cost accounting skills needs of small business operators in
Anambra State. Four research questions were formulated and answered by the study
while thirteen null hypotheses were formulated and tested at 0.05 level of significance.
The study adopted descriptive survey research design and was carried out in Anambra
State. The population for this study consists of 280 registered small business operators in
Anambra State. Due to the manageable size of the population, the entire 280 registered
small business operators were used for the study. Therefore, there was no sampling. The
instrument for data collection was a structured 56-item questionnaire. The questionnaire
was divided into five sections (A - E). Section A was used to obtain the personal data of
the respondents. Sections B, C, D and E were further structured into bipolar scale of
perceived importance and expressed possession to obtain the required data on recordkeeping, inventory control, inventory valuation and price determination skills of the small
business operators respectively. The instrument was face-validated by three experts. One
from Internal Audit Department, University of Nigeria Nsukka and two from the
Department of Vocational Teacher Education, University of Nigeria, Nsukka. To
determine the internal consistency of the instrument, Cronbach Alpha reliability
technique was adopted. Cronbach Alpha coefficient of 0.78 was obtained for recordkeeping skills, 0.83 for inventory control skills, 0.80 for inventory valuation skills while
0.75 was obtained for price determination skills needed by small business operators. The
researcher and with help of three research assistants facilitated the process of data
collection for the study. Out of the 280 copies of the questionnaire administered, 269
copies were returned and appropriately filled and used for data analysis. The data
collected were analyzed using mean and correlated t-test for answering the research
questions while t-test statistic and Analysis of Variance (ANOVA) were used for testing
the hypotheses at 0.05 level of significance. Based on the data analyzed, the study found
that cost accounting skills are perceived to be very important by the operators but the
levels of possession are still below expectation. The hypotheses tested showed that age,
experience and academic qualification of the small business operators significantly
influence the record-keeping, inventory control, inventory valuation and price
determination skills possessed by the small business operators while location has no
significant influence on price determination skills possessed by the business operators.
Based on these findings, the study recommended that a training programme be mounted
for small business operators in the state on cost accounting skills needed for business
operation. The training should focus on record keeping, inventory control, inventory
valuation and price determination skills for increase business performance.
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CHAPTER ONE
INTRODUCTION
Background of the Study
Ever since the use of money replaced barter, people have been concerned
with cost. Barter system was purely on exchange of goods for goods and services
for services. Costing system was first recognized in manufacturing industries with
the aim of determining cost of production or cost of a product. Presently, the
system is used widely in other establishments such as transport companies,
schools, government organisations, hospitals, banks, etc (Lucey, 2009).
The fundamental objective of any accounting system whether financial or
costing is to provide information relating to all parties who are interested in the
welfare of the organization.
They include owners, management, investors,
creditors, government, stock exchange, banks and other financial institutions
(Murthy and Gurusamy, 2009). The authors further stated that information needs
of the majority of users of accounting information can be satisfied by means of
financial statements such as profit and loss account, and balance sheet. However,
the needs of management cannot only be fulfilled with the information given in the
financial statements.
Management or owners of business need more than the information
presented in the financial statement. According to Agbata and Okafor (1999),
owners of business do not need only business information that enables them to
15
exercise control over the entire business in a general way, but day-to-day
information for planning, controlling and decision-making. The authors further
stated that profit-making organisations need information relating to the cost of their
products or services among others. In order to take the right decisions, avoid all
possible wastages, losses and to increase the efficiency of business performance,
the knowledge of cost accounting is very necessary.
Cost as defined by the Institute of Costs and Management Accountants
(ICMA), now known as the Chartered Institute of Management Accountants
(CIMA) London, according to Murthy and Gurusamy (2009), is the amount of
actual expenditure incurred on a given thing and notional expenditure incurred on a
given thing. According to the above definition, the term cost represents the total of
all expenses incurred, whether paid or due, in the production and sale of a product
or expended in rendering a service. Costing as further explained by the institute,
refers to the principles and rules that are applied for ascertaining cost of products
manufactured and services rendered. The process of costing as rightly noted by
CIMA is the day-to-day affair of ascertaining costs, whatever the cost ascertained
may be and by whatever means these costs are determined. Accounting for costs is
an indispensable tool for business survival.
Accounting is derived from the term ‘account’ which simply means
expression of transaction. It can also be seen as giving account of various business
transactions to the interested parties or business organisations. Horngren and
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Harison (2007) defined accounting as the information system that measures
business activity, processes the data into reports, and communicates the result to
decision makers or users. The authors opined that accounting is the language of
business and that the better businessmen understand the language, the better they
can manage their business.
Furthermore, the American Accounting Association (AAA) in Agbata and
Okafor (1999) defined accounting as the process of identifying, measuring and
communicating economic information to permit informed judgments and decisions
by users of accounting information. All cost and accounting infotmation are used
for decision-making.
Decision making is concerned with making a decision
between alternatives and frequently an important factor in making that choice is
the implication of various alternatives. Correctly presented cost information can
be of great value to management in decision making (Lucey, 2009). For the
purpose of this study the definition of accounting by American Accounting
Association (AAA) suffices.
Cost accounting is that branch of accounting that provides management or
owners of business with information needed for decision making.
Business
organisations need cost accounting information to make informed decisions
relating to what product to make or sell, how much profit or benefit that should be
generated, cost price and selling price of items and even items that are not
profitable.
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Furthermore, studying cost accounting is one of the best business
investments that operators can make. Horngren, Datar, Foster, Rajan and Ittner
(2009) stated that, success in any business from the smallest corner store to the
largest multi-national corporation requires the use of cost accounting. Jerry (1993)
opined that cost accounting deals with the classification, recording, allocation,
summarization and reporting of current and prospective costs following some
principles money measurement, periodicity, matching principles, etc.
Cost accounting as defined by Murthy and Gurusamy (2009) is the process
of accounting for costs which begins with recording of income and expenditure on
the basis of which they are calculated and ends with the preparation of periodical
statements and reports for ascertaining and controlling costs. This definition is
used in this study. Cost accounting usually starts from recording or maintaining
accounting books from diverse sources.
Baumback (2001) stated that some
knowledge of cost accounting skills are needed in almost every business operation.
Ndulue (2002) observed that most business units in the developing countries do not
keep proper accounting books or proper accounting records of their business. Cost
Accounting process involves record keeping, inventory control, inventory
valuation and price determination.
Record-keeping as defined in Austrialian Standard on Management is the
making and maintaining of complete, accurate and reliable evidence of business
transactions in the form of recorded information. Dun and Bradstreet in Osuala
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(2004) noted that, there is a correlation between inadequate records and business
failures. The operators of businesses inability to keep adequate records constitute a
major problem. Therefore not only are reliable records important for financial
management, planning and control, but are critical to the survival of the business.
Again, many business owners are unaware of their business financial status
and, therefore, are unable to make sound decisions because of inadequate recordkeeping or failure to keep up to date records (Osuala, 2005). Record keeping is an
indispensable business tool used in monitoring not only business performance but
also its inventory control.
Inventory simply means the goods and services that businesses hold in stock.
Inventory could be defined as the total amount of goods and or materials contained
in a store or a factory at any given time (Bessong, 2005). Inventory control
therefore means keeping the overall costs associated with having inventory as low
as possible without creating problems for customer satisfaction (Lucey, 2009).
In addition, insufficient inventory levels causes problem because shortages
and stock outs occur and customers become disillusioned and fail to return
(Osuala, 2004). Since the largest investment that any business must make is in
inventory, business operators should be able to control the inventory levels so as
not to be too high or too low. Inventory control is one of the most neglected of all
the management responsibilities.
Osuala (2004) also pointed out that a more
common situation is not only acquiring too much inventory, but also too much of
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the wrong type of inventory. Many businesses have an excess amount of working
capital tied up in an accumulation of needless inventory.
Carrying excess
inventory will also result in excess carrying cost and excess cost of holding them.
Cost accounting provides techniques and methods of controlling inventory.
Inventory valuation is another aspect of inventory management. Inventory
valuation is referred to as the cost assignment to inventory for the purpose of
establishing its current value. Businesses have various stocks or inventories held
in the form of raw materials, work-in-progress, finished goods, products bought for
resale, and service items (Lucey, 2009). Often the value of such stock is high,
representing a considerable sum of money and so it is important that it is valued
consistently, and proper controls are kept over the physical stock.
Similarly,
Murthy and Gurusamy (2009), submitted that stock of materials held by a business
invariably has considerable value and ties up lot money. The authors maintained
that, it is essential for a business to make a physical stock-take and to value its
stock for use in the financial statements in the calculation of profits and for the
balance sheet.
There are basically three methods of inventory valuation according to
Agbata and Okafor (2004) namely: First-in-First Out (FIFO); Last-in-First Out
(LIFO); Average Cost Method or Weighted Average.
FIFO method assumes that a business sells the goods in the order in which it
purchased them. In other words, the FIFO method assumes that goods should be
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sold in order that they were bought. Under FIFO, inventories are valued at current
prices. LIFO method on the other hand implies that goods purchased last should
be first sold. Weighted average cost method on its own, assumes that inventories
are sold or issued in batches and that each batch-tagger from the store is composed
of uniform quantities from each supply of stock and the date of sale/issue
(Retrieved on February 18, 2012 from http/www.scribd.com/doc/inventoryvaluation-methods) The stock valuation method adopted, has some impact on the
level of profit calculated.
Price is another element in profit determination and an important aspect of
cost accounting. Pricing a product simply means establishing a selling price for a
product. No matter the type of product or service, the price charged to customers
or clients will have a direct effect on the success of the business (Lipe, 2012).
Osuala (1996) defined price as the amount of money which is needed to acquire in
exchange some combined assortment of a product and its accompanying services.
Price is a very important factor that determines whether a profit is to be
made or not. Businesses who wish to set prices effectively, must determine the
role of price in profit determination. Osuala (2004) defined profit as the net
increase over a period of time in cash or capital cycled through the business and it
indicates how effectively the business is being managed over time.
Bessong
(2005) stated that if the price of a product or service does not cover costs, cash
flow will be cumulatively negative and will exhaust financial resources and in turn
21
causes failure. Ndulue (2002) observed that small business units in the developing
countries do not have what it takes to own a successful business in terms of skills
and knowledge. Similarly, Obi (2011) noted that many small business operators
do not have most of the entrepreneurial skills required for running a business. The
author explained further that lack of skills affects the management of the business
and subsequently the profit.
Researchers agreed that good record keeping,
inventory management and control, inventory valuation and good product pricing
are inevitable for business survival (Okoro, 2006; Ali, 2001 and Owoh, 2006).
Skill is imperative for good accounting, record-keeping, good inventory
control, inventory valuation and price determination.
Obi (2005), skill is the
ability to use one’s knowledge effectively and readily in performing an act, or a
habit of doing a particular thing competently. Nnachi (2007) refers to skill as the
ability to perform well in a task as a result of exposure, training or practice. The
author explained that an individual may hardly be skilled in a task without
exposure, training or practice. In line with the above analysis, this study seeks to
determine cost accounting skill needs of small business operators
Business may be referred to as an organisation that produces or distributes
goods and services.
Ayozie (2004) defined business as efforts of people to
produce and distribute the goods and services that are requisite for their well being,
comfort, safety and happiness and which are of benefit to society as a whole.
Adekola (2001) referred to business as an occupation, work, or trade in which a
22
person is engaged. A person who is engaged in a business is usually referred to as
an operator. Summer (2007) defined an operator as a person or organisation that
operates a particular business.
Furthermore, businesses are classified in most countries as micro, small,
medium and large businesses. This classification reflects the way businesses are
clustered according to selected criteria and ensures grouping of businesses with
similar characteristics such as size or type of product or service (Osuala, 2004).
The definition of what constitutes a small business for all practical purposes
defies precision.
This is because what is considered a small business in one
economy may be regarded as a medium or large scale business in another economy
(Osuala, 2004). Oyekanmi (2006) stated that, there is no universally accepted
definition of small business in Africa. The author buttressed that even definitions
in other countries lack uniformity and reflect the relative development of the
respective economies.
In Nigeria, the National Council of Industries (NCI) defined small business
as an industry with a labour size of 11-100 workers or a total cost of not more than
N50 million, including working capital but excluding cost of land.
Medium
industry on the other hand refers to an industry with a labour size of between 101300 workers or a total cost of over N50 million but not more than N200 million
including working capital but excluding cost of land (NCI, 2004).
23
The National Association of Small and Medium Enterprises (NASME,
2003) defined a small scale business as a business whose total cost including
working capital but excluding cost of land is over N10 million and/or a labour size
of between 31 and 70 full time workers and or with turnover of not more than N10
million. A medium scale enterprise is defined by NASME as an enterprise whose
capital investment including working capital but excluding the cost of land is
between N100 million and N300 million and or with a labour force of between 71
and 200 full time workers and or with a turnover of not more than 20 million.
Central Bank of Nigeria (CBN) defined small scale business in line with the
definition given by the National Council on Industry. Both asserted that a small
business is an enterprise with a labour size of between 11 - 100 workers or a cost
of between N1.5 - N50 million including working capital but excluding cost of
land. Both also defined medium scale business as an enterprise with a labour size
of between 101 and 300 or a cost between N50 - N200 million excluding cost of
land (Ukeje, 2003). This study adopts the definitions given by NCI and CBN.
This is because the definition is relatively more accommodating and will allow
majority of small scale business the opportunity to participate in any programme
designed for SMEs.
Small scale industries have been recognized by governments and
development experts as the main engine of economic growth and a major factor in
promoting private sector development and partnership. Udechukwu (2003) posited
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that the development of small scale industries is an essential element in the growth
strategy of most economies and holds particular significance for Nigeria.
Nigerian government has advanced loan facilities to small and medium scale
businesses through establishments, or agencies created for the purpose. These
include, the Nigerian Bank for Commerce and Industry (NBCI), Small Scale
Industries Credit Scheme established under the third National Development Plan,
National Economic Reconstruction Fund (NERFUND) and Family Economic
Advancement Programme (FEAP) was also established as micro-credit scheme
geared towards investment promotion and poverty alleviation in the various local
governments in Nigeria (Udechukwu, 2003).
Despite all the assistance by the government, small scale businesses still fail.
Summer (2007) noted that operators of small businesses have varying skills,
interests, knowledge, age, qualification and experience etc. Ayozie (2005) noted
that a good number of small business fail in the first one to five years of start-up.
Thribault (2002) found that factors influencing small business performance include
age of the business among others such as location, use of technology.
Ericson and Pakes (2005) substantiated that age could actually help become
more efficient. The authors gave the reason that overtime, business may discover
what they are good at and learn how to do things better. The business that have
stayed long will eventually specialize and find ways to standardize, coordinate and
speed up their production, processes as well as to reduce costs and improve quality.
25
Old age on the hand may also make knowledge, abilities, and skills obsolete and
induce organizational decay (Agarwal and Gort 2002).
Osuala (2004) asserted that many small business owners do not recognize
the importance or need for experience in their fields of business. The author
submitted that the right type of experience could mean the difference between
success and failure. Inexperience has been identified as one of the factors that
negatively influence small business operation. Gimenon 1997, Madsen 2003 and
Bosma (2004), agreed that prior experience in running a business positively related
with a business success.
Small business operators who have relevant experience in their business are
more likely to survive than those who are inexperience. Osuala (2004) noted that
those who enter fields in which they have no experience have an extremely slim
chance of survival. The author added that too many would-be small business
owners fail to recognize that the right type of experience can mean the difference
between success and failure.
Finally, the operators of small businesses may have an unbalanced
experience, which creates problems for the business. Also, Osuala (2004) stated
that a prospective small business manager should have adequate technical ability,
sufficient conceptual ability to visualize, coordinate and integrate the various
operations of the business into a synergistic whole.
The operators of small
26
business should possess skills needed to propel the business to higher level of
performance.
Inappropriate location is one the major challenge that affects business
performance. Many small business operators are found in both rural and urban
areas. The business whether to be located in rural or urban areas sometimes
depends on the type of product or service the business intends to produce or offer.
Flora and Flora (2004) listed some factors to be considered in choosing business
location to include: environmental restrictions, transportation, distance to
customers, cost of premise, support services, distance to suppliers.
Furthermore, the authors further stated that small manufacturers in rural
communities lose high technology or high skilled workers or labours that are
critical to their survival. Infrastructural problems also increase transaction and
start-up costs of small businesses in the rural areas. These include poor electricity
supply, poor communication and transportation.
Other challenges faced by rural small business include high risks of
financing since most commercial banks are not interested in granting credit
facilities to them owing to small amount of credit involved and lack of collaterals.
Again lack of completion from banks increases cost of borrowing (US Small
Business Administration 2001).
On the other hand, small businesses that are
located in urban areas are usually constrained by external influences such as
27
government regulations, high cost of premises and competition from larger
businesses.
Tainji (2004) pointed out that operators who have good educational
background are likely to succeed more than those who have poor educational
background. Small business operators comprise those with varying levels of
educational qualification which include Senior School Certificate (SSCE), National
Certificate on Education (NCE) National Ordinary Diploma (OND), Higher
National Diploma (HND) and Degrees (B.Sc, B.A, B.Ed) in several fields of study.
Ndulue (2002) found that educational qualification has a direct influence on
the level of skills possessed by small business operators.
In Nigeria, small business operators face a lot of constraints that limit their
growth and survival.
Osuala (2004) stated other controllable factors causing
business failures as: lack of experience, inappropriate location, lack of inventory
control, improper pricing and inexperience in record- keeping among others. Scott
(2003) opined that successful operation of small business requires that operators
should possess diverse range of skills. The author submitted that accounting skill
is fundamental in every business operation.
Similarly, Obi (2011) stated that managers of businesses should possess
skills in accounting, marketing, and personnel management. The author stated
that, there are few people who would undertake to train for the acquisition of these
skills and practice them. Obviously, no single research work will capture all the
28
business skills mentioned above. Hence, the thrust of this study therefore is to
determine the cost accounting skill needs of small business operators in Anambra
State. This study is informed for the fact that researchers have recommended that
good
record-keeping,
inventory
control,
inventory
valuation
and
price
determination are imperative for business survival. These are various component of
cost accounting which requires that operators should possess skills in practicing
them.
Statement of Problem
Economic depression and unemployment have probably made Nigerians
recognize the importance of innovation and creativity in solving economic
problems, which actually resulted in the establishment of small businesses. Small
business has been recognized for its role in employment creation and poverty
reduction in Anambra State. This is because majority of the citizens of the state
are business operators and many are engaged in small business. However, the rate
at which some of these businesses fail is quite alarming. Business failure could be
attributed to lack of appropriate skills and also to some of the anti-social behavior
among the youths such as incessant robbery attacks, kidnapping in the state that
disillusion the small business operators who may lose money to robbers and
sustain injuries or even die.
Ndulue (2002) observed that in practice many small business units in the
developing countries do not keep proper accounting records. Accounting records
29
are necessary for the monitoring of business activities through the information
revealed on day-to-day basis. Not keeping accurate and up-to-date record may be
due to lack of appropriate skills. Osuala (2004) stated that there is a positive
correlation between adequate record keeping and business failure. Proper recordkeeping will also help in monitoring inventory.
Insufficient inventory levels cause problems because shortages and stock
outs occur and customers become disillusioned and fail to return. Many small
businesses have an excessive amount of working capital tied up in an accumulation
of needless inventory. Another challenges faced by small business operators is in
the area of price determination. It is common to see some operators setting their
prices too high or too low. Osuala (2004) noted that most small businesses tend to
under price their goods and services resulting in lower revenues and profits. Any
business that fails to make profit over time is bound to liquidate.
Business
operators should be able to set their prices in other to maximize profit if they must
continue to operate and progress in the business.
Ayozie (2003) submitted that most small business operators do not have the
basic accounting knowledge and skills which are very essential for successful
operation of business. Furthermore, it has been observed that no one study has
been carried out to determine the skills possessed by these operators in order to
help them fill the skill gap. Hence there is a need to determine the cost accounting
skill needs of small business operators by establishing what they already possess
30
against the important skills in the area of record-keeping, inventory control,
inventory valuation and price determination practices so as to help them fill the gap
to reduce business failure and consequently increase performance.
Purpose of the Study
The major purpose of this study was to determine the cost accounting skill
needs of small business operators in Anambra State. Specifically, the study sought
to determine:
1.
the perceived level of importance and expressed level of possession of
record-keeping skills by small business operators.
2.
the perceived level of importance and expressed level of possession of
inventory control skills by small business operators
3.
the perceived level of importance and expressed level of possession of
inventory valuation skills by small business operators.
4.
the perceived level of importance and expressed level of possession of price
determination skills by small business operators.
Significance of the Study
The findings of this study
will be of immense benefit to Nigerian
Associations of Small and Medium Scale Enterprises such as the: Nigerian
Association of Small and Medium Scale Enterprise (NASME), Nigerian
31
Association of Small Scale Industrialists (NASSI). Others will also benefit; such
as Small and Medium Enterprises Development Agency of Nigeria (SMEDAN),
present and potential SME operators, Anambra State Ministry of Commerce and
Industry, educational institutions, and researchers.
The Nigerian Association of Small and Medium Scale Enterprises, Small
and Medium Enterprise Development Agency of Nigeria and the Nigerian
Association of Small Scale Industrialists will also benefit from this study. These
organisations will use the findings of this research work as a useful package for
organizing seminars, conferences, and workshops for training and retraining of
small business operators.
The findings of this study will also be of immense assistance to both the
present and potential small business operators in Anambra State. The study will
help to create to them the awareness and knowledge of cost accounting skills
required for successful business operation. They will understand the importance of
keeping accurate, timely and relevant record in their business operation. Inventory
control, inventory valuation, and price determination skills gained from the
findings would serve to improve the business performance of operators.
Anambra State Ministry of Commerce and Industry will also benefit greatly
from the findings of this study. The findings of this study will enable the Ministry
establish programmes for improving and developing the SME sub-sector in the
state. The findings of this study will also enable the State Ministry of Commerce
32
and Industry make policies that will guide the preparation and maintenance of
accounting books by small and medium scale businesses.
Educational institutions offering accounting will not be left out from using
the findings of this study. Specifically, business education department offering
cost accounting courses will use the findings to review their course content and pay
more attention to the cost accounting skills needed for small business operation.
The students will find the findings useful in understanding the relationship of
record keeping, inventory control and valuation as well as the price determination
skills in conducting business.
The findings will provide database for further research in cost accounting.
Students will even try to organize and manage small businesses to practice the
skills.
Research Questions
The following research questions based on the specific purposes were
formulated to guide the study:
1.
What are the perceived level of importance and expressed possession of
record-keeping skills by small business operators in Anambra State?
2.
What are the perceived level of importance and expressed possession of
inventory control skills by small business operators in Anambra State?
3.
What are the perceived level of importance and expressed possession of
inventory valuation skills by small business operators in Anambra State?
33
4.
What are the perceived level of importance and expressed possession of
price determination skills by small business operators in Anambra State?
Hypotheses
The following hypotheses stated in null form were tested at 0.05 level of
significance:
H01: Age is not a significant source of difference on the perceived importance and
expressed possession of recording keeping skills among small business
operators.
H02: Age is not a significant source of difference on the perceived importance and
expressed possession of inventory control skills among small business
operators.
H03: Age is not a significant source of difference on the perceived importance and
expressed possession of inventory valuation skills among small business
operators.
H04: Age is not a significant source of difference on the perceived importance and
expressed possession of price determination skills among small business
operators.
34
H05: Experience is not a significant source of difference on the perceived
importance and expressed possession of record-keeping skills among small
business operators.
H06: Experience is not a significant source of difference on the perceived
importance and expressed possession of inventory control skills among
small business operators.
H07: Experience is not a significant source of difference on the perceived
importance and expressed possession of inventory valuation skills among
small business operators.
H08: Experience is not a significant source of difference on the perceived
importance and expressed possession of price determination skills among
small business operators.
H09: Qualification is not a significant source of difference on the perceived
importance and expressed possession of record-keeping skills among small
business operators.
H010: Qualification is not a significant source of difference on the perceived
importance and expressed possession of inventory control skills among
small business operators.
H011: Qualification is not a significant source of difference on the perceived
importance and expressed possession of inventory valuation skills among
small business operators.
35
H012: Experience is not a significant source of difference on the perceived
importance and expressed possession of price determination skills among
small business operators.
H013: Location is not a significant source of difference on the perceived importance
and expressed possession of price determination skills among rural and
urban operators
Delimitation of the Study
This study was delimitated to the cost accounting skill needs of small
business operators in Anambra State. The study covered the record keeping skill,
inventory control skill, inventory valuation skill and price determination skill needs
of small business operators in Anambra State. The study did not cover financial
accounting skill needs of small business operators in the area chosen for the study.
36
CHAPTER TWO
REVIEW OF LITERATURE
The literature related to this study were reviewed and organized under the
following headings;
Conceptual Framework
·
Small Business
·
Cost Accounting
·
Recordkeeping
·
Inventory Control
·
Inventory Valuation
·
Price Determination
Theoretical Framework
Related Empirical Studies
Summary Reviewed Literature
Conceptual Framework
Small Business
Business according to Adekola (2010) refers to occupation, work or trade in
which a person is engaged in. Evarard and Shift in Adekola (2010) also defined
business as an organisation that produces or distributes goods and services. Ayozie
(2004) defined business as efforts of people to produce and distribute the goods
24
37
and services that are requisite, for their well being, comfort, safety and happiness
and which are of benefit to society as a whole.
According to Obi (2011), there are various sizes of business in Nigeria. The
author explained that the size of a business depends on the number of
employees/workers in it, the unit value of goods it produces or services it offers
and capital outlay. National Investment and Promotion Commission (NIPC) in
Obi (2011) similarly defined the size of a business according to turnover, number
of employees and amount of investment in assets, excluding real estate.
In most countries, businesses are usually classified as micro, small, medium
and large business. This classification reflects the way businesses are clustered
according to selected criteria and ensures grouping of business with similar
characteristics (Osuala, 2004). The definition of what constitute a small business
for all practical purposes defies precision. This is because what is considered a
small business in one economy may be regarded as a medium or large business in
another economy.
Oyekami (2006) stated that, there is no universally accepted definition of
small scale business in Africa. The author buttressed that even definitions in other
countries lack uniformity and reflect the relative development of the respective
economies. Small business definition therefore is an individual country’s specific
and is based on the size and level of the economy. Even in the same country,
different institutions and organisations may adopt different definitions, depending
38
on their purpose or focus. Certain criteria that have been used in the definition
include: number of employees, turnover, investment capital and total assets.
National Council on Industry (NCI) defined small business as an industry
with a labour size of 11-100 workers or a total cost of not more than N50 million,
including working capital but excluding cost of land. On the other hand medium
business is defined as an industry with a labour size of between 101-300 workers
or a total cost of over N50 million but not more than N200 million including
working capital but excluding cost of land (NCI, 2004). The Small and Medium
Industries and Equity Investment Scheme (SMIEIS) defined SME as any
enterprise, with a maximum asset base of N200 million excluding land and
working capital and with the number of staff employed not less than 10 or more
than 300.
Adenekan (2008) noted that, the World Bank in 1988 classified small scale
business as one with fixed assets, excluding land and working capital which do not
exceed N10m. The National Association of Small and Medium Enterprises defined
a small business as a business whose total cost including working capital but
excluding cost of land is over N10 million but not more than N100 million and or a
labour size of between 31 and 70 full time workers and or with turnover of not
more than N10 million. On the other hand, a medium enterprise is defined as an
enterprise whose capital investment including working capital but excluding the
cost of land is between N100 million and N300 million and or with a labour force
39
of between 71 and 200 full time workers and or with a turnover of not more than
N20 million (Obi, 2011).
Central Bank of Nigeria (CBN) defined small scale business in line with the
definition given by the National Council on Industry. Both asserted that a small
scale business is an enterprise with a labour size of between II and 100 workers or
a cost of between N1.5 million and N50 million including working capital but
excluding cost of land. They defined medium scale enterprise as an enterprise with
a labour size of between 101 and N200 million excluding cost of land (Ukeje,
2003).
Small scale industry is defined as any business with employee capacity of 549 people (Tanzania Ministry of Trade, 2002).
The definition of SMEs in
Romania is limited to only enterprises that carry out activities in the field of
production of goods and services. Any enterprise that has employment capacity of
between 10-49 persons is regarded as a small enterprise. On the other hand,
medium scale enterprises must have an employment capacity of 50 to 249 persons
(United Nations Report, 2003).
According to the European Commission (EC), SMEs are those, enterprises
that employ fewer than 250 people and have annual sales not exceeding $67
million and or total assets not exceeding $56 million. Small enterprises are defined
as those enterprises employing less than 50 persons and with annual sales or total
assets that do not exceed $13 million. The definition of the European Commission
40
takes into consideration three different indicators; staff head counts, annual sales
and assets. The EC’s definition was introduced to ensure that eligible enterprises
engaging in different types of economic activities do not lose their status as SMEs
(EC, 2004).
Multilateral Investment Guarantee Agency (MIGA) and International
Finance Corporation (IFC), defined small enterprises as those that meet two of the
following three conditions. (i) Less than 50 employees (ii) Less than $3 million
total assets (ii) Less than $3 million total annual sales.
Meanwhile, medium
enterprises are those enterprises that meet two of the following three conditions =
less than 300 employees, less than $15 million total assets, less than $15 million
total annual sales (MIGA and IFC, 2004).
Asia Pacific Economic Cooperation (APEC) referred to SMEs as enterprises
with less than 100 people, whereby a medium sized enterprise employs between 20
and 99 people, a small firm employ between 5 and 19 people, a a micro firm
employs less than 5 employees which include self employed managers. The most
common criteria used within the economies of APEC is the number of employed
personnel within the business (APEC, 2004).
United Nations Industrial Development Organisation (UNIDO) refers to the
definition set by the Ministry of Industry and Trade (MIT) which defined SMEs as
follows, small enterprises employ between 10-49 employees and have registered
capital of more than $42,300, medium enterprises employ between 50 to 249
41
employees and have a registered capital of more than $42,300 while large
enterprises on the other hand are those employing more than 250 employees and
have a registered capital of more than $42,300 (http://www.SABEQ-Jordan.orgRetrieved 13th February, 2012).
According to the Organisation for Economic Cooperation and Development
(OECD), the characteristics of SMEs not only reflect the economic patterns of a
country but also the social and cultural dimensions. These differing patterns are
noticeably reflected within different definitions and criteria of SMES adopted by
different countries. Whereas some refer to the number of employees as their
distinctive criteria for SMEs, others use a combination of the number of
employees, invested capital, sales and industry type (OECD, 2004).
Small scale industries contribute substantively to two fundamentals of
poverty reduction – job creation and economic growth, adding that they are
important for successful economic growth and social development (Oyekanmi,
2006). Similarly Alade (2004) stated that, the impacts of SMEs are so great that no
country can move forward economically and industrially without a strong SME
sub-sector. The author mentioned some of the contribution of SMEs to include job
creation, utilization of local raw materials, entrepreneurship development, and
poverty reduction. Also Odubanjo in Obi (2011) stated that small businesses are
advantageous in capacity building, employment creation, promoting growth,
42
supply of raw materials and semi finished goods to big enterprises for further
production, improving living conditions in the rural areas.
The production and distribution of goods and services in the most efficient
manner has continued to be the only viable and reliable option for development,
growth and survival of any economy.
The development of small business in
Nigeria is therefore an essential element in the growth strategy (Okufolami, 2003).
The author explained further that small scale industries not only contribute
significantly to improved living standards, they also bring substantial local capital
formation and achieve high level of productivity.
Furthermore, small scale industries have been recognized by government
and development experts as the main engine of economic growth and a major
factor in promoting private sector development and partnership.
Udechukwu
(2003), posited that the development of small scale industries is an essential
element in the growth strategy on most economies and holds particular significance
for Nigeria.
Ibikunle (2009), asserted that there is need to provide enabling
environment for the survival of small scale industries. This is to enable the small
scale businesses to continue in their role of economic transformation of Nigerian
economy.
The role of SMEs in Nigerian economy to include: mobilization of domestic
savings for investment, appreciable contribution to gross domestic products,
increased harnessing of local raw materials, employment generation, and
43
contribution to poverty reduction through sustainable livelihood and enhancement
in personal income etc (Ibikunle, 2009).
In order to create enabling environment for survival of small businesses,
government has established financial support programmes for promoting small
scale industries in Nigeria.
These include: (a) Small scale industries credit
guarantee scheme which was established in 1971 as a matching grant arrangement
between the federal and state government; (ii) Establishment of the Nigerian Bank
for Commerce and Industry (1973); (iii) Central Bank of Nigeria credit guidelines
which required banks to allocate varying amounts of stipulated minimum credit to
the preferred sectors of the economy, including small scale enterprises; (iv)
Establishment of the National Economic reconstruction Fund (1989), (v) World
Bank SME Loan Scheme (1990); (vi) Fiscal Incentives in the form of tax relief to
all small and medium enterprises during the first six years of operation.
Some other agencies were created to take charge of promoting and
facilitating development programmes in micro, small and medium enterprises
(Adelaja, 2004).
These agencies include Small and Medium Enterprises
Development Agency of Nigeria (SMEDAN), Nigeria Association of Small Scale
Industrialists (NASSI), Nigerian Association of Small and Medium Scale
Enterprise (NASME). All these agencies were created as part of the effort of the
government to ensure survival of SMEs in the private led sector.
44
Despite programmes of assistance in the area of finance, extension and
advisory services, and provision of infrastructure, the full potential of small scale
industries in the developmental process have not been fully realized owing to yet
some fundamental constraints.
Skill in marketing, accounting and production
management should be possessed by operators to enhance performance. Finances
cannot represent skill. This study has identified some cost accounting skills that
should be possessed by small business operators to include: accounting record
keeping skill, inventory control skill, inventory valuation skill and price
determination skill.
Cost Accounting
According to Lucey (2009), every business organisation, no matter its size
needs information relating to the cost of goods and services it renders. Cost is
defined as the amount of expenditure incurred on or attributed to a specified thing
or activity (Bessong, 2005). Glautier and underwood (1998) simply defined cost
as essentially money measurement of the sacrifices which an organisation has to
make in order to achieve its objectives. Lucey (2009) sees cost as the amount of
cash or cash equivalent or the fair value of other consideration given in order to
acquire an asset at the time of its acquisition or construction. Cost is usually
monetary valuation of efforts, materials, resources, time and utilities consumed,
risk incurred and opportunity forgone in production and delivery of goods and
services (Retrieved January, 20 2012 fromhttp://www.businessdictionary.com).
45
Similarly, Horngren, Datar, Foster, Rajan and Itner (2009) defined cost as a
resource sacrificed or forgone to achieve a specific objective. The authors agreed
that cost is usually measured as monetary amount that must be paid to acquire
goods and services. Jerry (1993) also sees cost as value given up by an entity in
order to receive goods or services. Cost represents actual cost incurred in
manufacturing a product or in completing a job. The total cost of material, labour
and other expenses.
The true cost is ascertained either at various stages of
completing the production or at the end of completion of the job (Agbata and
Okafor, 1999). The above definition is in line with the one given by the Institute
of Management Accountants (CIMA) in Murthy and Gurusamy (2009) which
defined cost as the amount of (i) actual expenditure incurred on a given thing and
(ii) notional expenditure, attributable to a given thing”.
The above definition
suggests that cost represents the total of all expenses incurred, whether paid or due,
in the production and sale of a product or expended in rendering service.
According to Okwo (1999), cost can be defined in various ways depending
on the situation under consideration. The author opined that, for pricing purposes
cost is the anticipated product cost based on the determination of normal capacity.
In planning situations, costs are expectations of what the future sacrifice will be.
Still in Okwo (1999) cost can be seen as a price paid or to be paid for something.
In this study, cost can be seen as money sacrifice or liability incurred for a
particular commodity or service.
46
The techniques and process of ascertaining cost involve three steps, namely:
collection of expenditure or cost data, classification of expenditure as per cost
elements, functions, etc, and allocation and apportionment of expenditure to the
cost-centres and cost units (Lucey, 2009).
Furthermore, for the purpose of
identification, accounting and control, breakup of cost into its elements is essential.
Elements are related to the process of manufacture that is, the conversion of raw
materials into finished products. Costs are normally broken down into three basic
elements, namely, material, labour and expense.
Material cost includes all
materials consumed in the process of manufacture up to the primary packing.
Labour cost includes all remuneration paid to staff and workmen for
conversion of raw materials into finished goods. Expenses consist of the cost of
utilities and services used for the conversion process including notional cost for the
use of owned assets (Pinson, 2007). These techniques and process of ascertaining
cost are applied in this study.
Agbata and Okafor (1999) noted that costing involves the principles and
rules that are applied to ascertaining cost of products manufactured and services
rendered. The process is the day-to-day affairs of ascertaining costs, whatever the
cost ascertained may be and whatever means these are determined. Murthy and
Gurusamy (2009) opined that cost control is necessary so that the maximum and
better production at minimum cost may be possible.
To achieve the above
objective, the authors recommended the use of budgetary control and standard
47
costing system. The authors went further to state that costs are not only to be
controlled, but also constant efforts are to be made for reducing them.
Cost
reduction implies real and permanent reduction in the unit cost of goods
manufactured or service rendered without impairing their (products or service)
suitability for the intended use.
Accounting for cost of goods and services
rendered by business organisation is very important for their survival (Ikpe, 2006).
Accounting can be seen as a system that take economic events and
transactions, such as sales and materials purchases, and process the data into
information helpful to managers, sales representatives and others (Horngren, Datar,
Foster, Rajan and Ittner, 2009).
Accounting is derived from the term ‘account’
which means expression of transaction. Accounting can also be seen as giving
account of various business transactions to the interested parties or business
organisations. Hongren and Harison (2007) defined accounting as the information
system that measures business activity, processes the data into reports and
communicate the result to decision makers. The authors opined that accounting is
the language of business and that the better businessmen understand the language,
the better they can manage their business.
Furthermore, the American Accounting Association (AAA) in Agbata and
Okafor (1999) defined accounting as the process of identifying, measuring and
communicating economic information to permit informed judgment and decision
by users of accounting information. Decision making is concerned with making
decision between alternatives and frequently an important factor in making that
48
choice, is the implication of various alternatives.
Correctly presented cost
information can be of great value to management in decision making (Lucey,
2009).
According to the American Institute of Certified Public Accountants
(AICPA) accounting is 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 a financial character and interpreting the results thereof (Agboh,
2007). Gale Encyclopedia of Small Business (2002) defined accounting as the
language of business because it is the basic tool for recording, reporting and
evaluating economic events and transactions that affect business enterprises. Eneje
and Okafor (2004) sees accounting as a discipline concerned with the recording,
analyzing and forecasting of income and wealth of business and other entities.
Wood (2003) refers to accounting as the recording, summarization, analysis and
interpretation of financial transactions in order to enable management make
decisions for the firm.
Similarly, Uzuegbuna (2001) defined accounting as the recording,
classification, analysis and interpretation of financial records.
Carritters and
Weinwurm (2001) opined that the goal of accounting is to maintain accurate
records at a minimum cost to facilitate rapid extraction and reporting of accounting
information. Wood and Omuya (2003) maintained that accounting information
will enable owners of business to know whether the firm is operating at a profit or
loss and whether the business will be able to meet its commitments as they fall
49
due. Olatunji (2002) opined that accounting includes the design of the financial
information system preparation of financial statements, development of forecast
and their analyses and interpretation of accounting information to assist decision
makers in making informed decisions. Akintelure and Oguobi (2003) asserted that
accounting is the recording, classifying and summarizing of financial transactions
or event in terms of money and reporting the result to management.
Okechukwu, Eneje and Okafor (2004) maintained that accounting is the
process of measuring, recording, classifying, summarizing and communicating
financial information that is used in making economic decision to interested
persons or parties. Ekwere (2005) conceptualized accounting as information
processing system that provides quantitative information, primarily financial in
nature about economic activities that are intended for rationale decision-making
Ekwere added that accounting is regarded as a service entity because it provides
information to every area of an organisation. Asaolu (2005) succinctly noted that
accounting is the art of accurate book-keeping or recording of transactions.
Agreeing with Asolu, Ikpe (2006) opined that accounting is traditionally
conceived as a profession or the work of keeping proper accounting books. Ikpe
revealed that accounting is the process of collecting, recording, presenting and
analyzing financial information. These definitions revealed that accounting has
three phases thus: collection/recording, presentation and interpretation phases.
Accounting is the means by which managers are informed about the
financial status and progress of their companies. Accounting contributes to the
50
continuous process of planning, controlling of operations and decision-making.
Accounting provides methods of systematically recording and evaluating business
activities (Walgen, Hanson and Dittrich, 2002).
According to Giffith (2002),
accounting helps to ascertain the profit or loss and income and expenditure of the
business. Accounting,
according to Giffith, also helps to determine the growth
and provide financial information about an organisation.
The success of any
business depends on the proper knowledge of keeping accounting records and
procedures. The failure of most small and medium scale businesses always had to
do with keeping of improper accounting records.
Accounting to Nikolai, Bazley and Stalleman (2002) is defined as recording,
classification, analysis and interpretation of financial records for a business to
survive, no matter its size, it must make it compulsory for all transactions that had
to do with money as it affects the business to be recorded in the proper accounting
books. Similarly, Igboke (1999) defined accounting as the collecting, recording,
summarising, analyzing and reporting in monetary terms information about a
business organisation. The author further defined accounting as a measurement
and communication system which provides economic and social information about
a business organisation which will permit users to make informed decisions
leading to optimum allocation of resources of the organisation and goal
achievement.
Accounting is classified into three main branches as follows: management
accounting, financial accounting and cost accounting.
Horngren et al (2009)
51
described management accounting as that branch of accounting that measures,
analyses and reports financial and non financial information that helps managers to
make decisions to fulfill the goals of an organisation. Management accounting
information therefore does not follow set principles or rules. Financial accounting
on the other hand focuses on reporting to external parties such as investors,
government agencies, banks and suppliers. Financial accounting measures and
records business transaction and provides financial statements that are based on
Generally Accepted Accounting Principles (GAAP).
Cost accounting on its own provides information for management
accounting and financial accounting. Cost accounting measures, analyses and
reports financial and non financial information relating to costs of acquiring or
using resources in an organisation. Cost accounting is the process of determining
and accumulating the cost of a product or activity.
Cost accounting is also a process of accounting for the incurrence and
control of cost. It also covers classification, analysis and interpretation of cost. In
other words, it is a system of accounting which provides information about the
ascertainment and control of costs of products or services aimed at measuring the
operating efficiency of a business (Agbata and Okafor, 1999). Bessong (2005)
views cost accounting as that branch of accounting aimed at providing cost data,
statement and reports for the purpose of managerial decision making. Murthy and
Gurusamy (2009) refers to cost accounting as the process of accounting for cost
which begins with the recording of income and expenditure, on the basis of which
52
they are calculated and ends with the preparation of periodical statements and
reports for ascertaining and controlling costs.
The Chartered Institute of Management Accountant in Agbata and Okafor
(1999) defined cost accounting as a process of accounting from the point at which
expenditure is incurred or committed to the establishment of its ultimate
relationship with cost centres and cost units. Cost accounting as opined by CIMA
embraces the preparation of statistical data, application of cost control methods and
ascertainment of profitability of activities carried out or planned. Similarly, Lucy
(2009) defined cost accounting as gathering of cost information and its attachment
to cost objects, the establishment of budgets, standard costs and actual costs of
operations, processes, profitability or the social use of funds.
Hongren et al (2009) opined that cost accounting provides key data to
managers for planning and controlling, as well as costing products, services and
customers. The authors further viewed cost accounting as a managerial tool for
business strategy and implementation. Witzell in Okoro (2006) defined strategy as
planned approach to the achievement of long term goals, including the activities a
firm will undertake, the resources it will require, and the markets where it will do
business, among others.
Still in Okoro (2006) Nickols defined strategy as a
general framework that provides guidance for actions to be taken and at the same
time, is shaped by the actions taken. Strategies as used in the definition given by
Horngren et al (2009) means all those course of action taken by businessmen in
53
order to see that operations are carried out smoothly and in a profitable way.
Horngren et al (2009) further viewed cost accounting as that branch of accounting
which measures, analyses, and reports financial and non-financial information
relating to the costs of acquiring or using resources in an organisation.
Okwo (1999) opined that cost accounting is that branch of accounting which
involves analysis and recording of financial transaction with respect to materials,
labour and overheads.
The author maintained that cost accounting involves
collecting and analyzing records to show costs of a given product or services
rendered and that cost accounting presents and apply cost information for the
proper and effective management of the business. Okwo further explained that
cost accounting include such activities as cost book-keeping which involves
maintaining complete records of all costs incurred from their incurrence to their
charge, to departments, products and services. Such recording is preferably done
on the basis of double entry.
According to Longe and Kazeem (2006), the principle of double entry
bookkeeping states that every debit entry must have a corresponding credit entry.
The authors went further to explain that the modern way of recording business
transaction is founded on the principle of double entry book-keeping.
Agbata and Okafor (1999) noted that cost ascertainment is an important
function of cost accounting. The author further explained that cost ascertainment
is the basis of managerial decision making such as pricing, planning and control.
54
The authors viewed further that cost accounting also includes comparisons
between cost from alternative courses of action such as use of technology for
production, cost of making different products and activities, and cost of same
product/services over a period of time.
Murthy and Gurusamy (2009) similarly noted that, determining the cost of
products is very important aspect of cost accounting. The total product cost and
cost per unit of product are important in deciding selling price of product. The
authors maintained that cost accounting provides information regarding the cost to
make and sell product or services. The authors added that other factors such as the
quality of product, the condition of the market, the area of distribution, the quantity
which can be supplied etc are also to be given consideration by the management
before deciding the selling price, but the cost of product plays a major role.
Agbata and Okafor (1999) outlined the following objectives of cost
accounting:
1.
Determining the selling price
2.
Controlling cost
3.
Providing information for decision-making
4.
Ascertaining costing profit
5.
Facilitating preparation of final accounts and other statements.
Okwo (1999) also stated that cost accounting helps in attaining aim of
controlling cost by using various techniques such as budgetary control, standard
costing and inventory control. Each item of cost (material, labour and expenses
55
incurred are compared with the budget). This will help increase the efficiency of
the enterprise.
Cost accounting equally helps the management in providing information for
managerial decisions, for formulating operative policies. These policies relate to
the following; (a) determination of cost volume profit relationship; (b)
make
or buy a component; (c) shut down or continue operation at a loss; (d) continuing
with existing machinery or replacing them by improved and economically
machines (Agara, 2005). The author further stated that cost accounting helps in
ascertaining the costing profit or loss of any activity on an objective basis by
matching cost with the revenue of the activity. Cost accounting therefore produce
statements at short intervals as the management may require.
In order to operate business at high efficiency, it is essential for
management to have a review of production, sales and operating results. Murthy
and Gurusamy postulated that cost accounting provides daily, weekly, or monthly
statements of units produced or sold accumulated cost with analysis.
Cost
accounting also provides immediate information regarding stock of raw materials,
semi-finished goods, finished goods and items for sale.
Cost accounting is an expanded phase of the general or financial accounting
of a business concern which provides the operators promptly with the cost of goods
produced or sold and the cost of service rendered. A method of accounting in
which all costs incurred in carrying out an activity or accomplishing a purpose are
collected, classified and recorded. The data is then summarized and analyzed to
56
arrive at a selling price or to determine where savings are possible (Retrieved on
Febuary 8, 2012 from http://www.business dictionary.com).
Record-keeping,
inventory control, inventory valuation and price determination are various
components of cost accounting. Small business operators need skills in these areas
to increase their business operation and to reduce business failure. The schematic
representation of the conceptual framework is depicted in the figure 1 below.
Small Business
Performance
Skill
Increased
Cost Accounting
Price
Inventory
Determinatio
Valuation
Most small businesses operators in the developing counties lack
the relevant
n Skills
Skills
Record
Keeping Skills
Inventory
Control Skills
skills needed for successful operation of small businesses. Skill is highly needed
Fig. 1: Conceptual Framework for Cost Accounting Skill Needs of Small Business Operators
Source:
The Researcher
for
increased
performance and it is critical for the survival of any business. The
schema representing the conceptual framework in figure 1 above showed the
57
identified cost accounting skills needed for successful operation of small business.
The cost accounting skills include: record-keeping, inventory control, inventory
valuation and price determination skills. Studies have also revealed gaps in these
various components of cost accounting. Hence, the study sought to determine
specifically the skill needs of small business operators in record-keeping, inventory
control, inventory valuation and price determination. This will enable the operators
to fill the existing gap in skills to reduce their business failure and consequently
increase performance.
Record Keeping
An appropriate record keeping system can determine the survival or failure
of a new business. For those already in businesses, good record keeping systems
can increase the chances of staying in business and the opportunity to earn larger
profits (Pinson, 2007). Complete records as posited by the author will keep a
business operator well informed about the business operations and obligations and
also help to see problems before they occur. In the context of this research work,
record keeping refers to the maintenance of books of accounts/accounting record
keeping.
A record keeping system is a manual or automat zed system that collects,
organizes and categories records, facilitating their preservation, retrieval, use and
disposition (Retrieved on 12 March, 2012 from http://www.epa-gor/record). Good
record keeping will help in monitoring the progress of a business, preparing
58
financial statements, identifying source of receipts, keep track of deductible
expenses, and prepare tax returns (Pinson, 2007).
According to Generally Accepted Record Keeping Principles (GARP),
records and recordkeeping are inextricably linked with any organized activity. It is
only through the information an organisation records in the normal course of
business that it can know what it has done and effectively plan what it will do in
the future. As contained in the GARP, record keeping is a key resource in the
operation of any organisation, therefore records must be created, organized,
secured, maintained and used in a way that effectively supports the activity of that
organisation including: facilitating and sustaining day-to-day operations,
supporting predictive activities such as budgeting and planning; assisting in
answering questions about past decisions and activities, demonstrating and
documenting in compliance with applicable laws, regulation and standard
(Retrieved on Feb 16, 2012 from www.arma.org/GARP/).
Principle of Accountability states that an appropriate method should be
established and implemented to support record-keeping. The principle also stated
that, someone should be designated with the responsibility of maintaining records
in an organisation. The person, who is to be charged with the responsibility of
keeping accounting record, must have the basic accounting record-keeping skill
(Retrieved on Feb 16 from www.arma.org/GARP)/). These basic skills include:
debit and credit entries in various books of account, posting entries to ledger
59
accounts using the principle of double entry, post transactions to subsidiary books
from source document.
Nevertheless, the importance of establishing and maintaining sound basic
accounting practices cannot be over emphasized to make sure that the business is
performing in a financially desirable way. Ezejulu (2004) maintained that many
small businesses fail due to lack of proper record- keeping. The author pointed out
that one of the most important elements shared by all successful businesses of any
size is keeping accurate records, which is also a legal requirement. The author
concluded that to remedy lack of understanding of basic accounting principles, a
course in business accounting will generally include record-keeping skills.
Record-keeping as defined in the Australian Standard on Records
Management, refers to the making and maintaining of complete, accurate and
reliable evidence of business transactions in the form of recorded information.
Ekwere (2005) asserted that businesses are established for trading and profit
making. In the process of trading, purchases of and sales of goods and services are
usually made and these are referred to as business transactions.
Good record-keeping is essential to small business because it supports all
communication and decision making. Good record keeping enables a business
operator to: (a) recall the detail of what was decided (b) prove what was done or
decided (c) provide evidence of business transactions (d) make decisions
60
consistently and formulate policy on a solid basis of knowledge and not to be
based on guess work (Pinson, 2007).
Osuala (2004) submitted that managers’ inability to keep adequate records
constitutes a major problem. Adding that financial records are important, not only
for financial and management planning and control, but they may also be critical to
the survival of the business. Similarly, Adekola (2010) stated that, to make the
present pace of change in the business world and maintain a competitive edge, the
small business owner/manager must know the status of their business on a daily
basis. The author opined that, many managers or owners of small businesses are
unaware of their business financial positions because of inadequate record keeping
or failure to keep records up-to-date.
Keeping accurate and up-to-date records is vital to the success of any
business. The operator of business must realize that record kept will be one of the
most important management tools it possesses and therefore, it should be allocated
due importance. Many small business owners invest a lot of time and effort into
the running of their business and yet fail to realize the importance of maintaining
good
document
(Retrieved
on
Feb
24,
2012
from
www./smartsmall
business.gld.gov.au.)
Many small business owners considered record-keeping as one of the least
important part of operating business. Agboh (2007) asserted that good recordkeeping can show whether a business is improving, which items are selling and
61
what changes are needed. The author submitted that good record keeping can be
the difference between failure and success.
In modern times, the recording of business transactions in the books of
account is founded on the principle of double entry book-keeping (Okechukwu,
Eneje and Okafor, 2004). The principle of double entry states that every debit
entry must have a corresponding credit entry. This means that every transaction
must have two aspects – receiving and giving (Longe and Kazeem, 2006). Longe
and Kazeem further stated that procedures for double entry bookkeeping are: the
keeping of books of accounts, the division of each book into separate accounts,
each account is divided into two halves, left hand side (Debit) and right hand side
(credit).
Business transactions could be classified as cash and credit transactions
(Ekwere, 2005). All cash transactions must pass through the cash book. A cash
book is one of the books of original entry where all cash transactions are recorded
before transferring them to the ledger account (Olantunji, 2002),maintained that
there are two books of accounts subsidiary and principal books. Essien (2004)
stated that the two books are very necessary in recording of business transactions.
Subsidiary books as the books of original entry in which events and transactions
are initially recorded before being posted to the ledgers (Olatunji, 2002). Vickery
in Agboh (2007) defined ledger as the book of accounts which contains, in a
suitably classified manner the final and permanent record of a trader’s transactions.
62
The ledger is also called the principal book of accounts with which permanent
record of all transactions are kept either directly from source documents or as may
be adopted through the books of original entry.
The reasons for preparing subsidiary books are; to know the value of total
sales and purchases, they are used as books to make first entry of transactions, and
to keep track of the people to whom money is owed and of the people who owed
money. Agboh (2007) stated that subsidiary books serves as aids to memory as
every detail of business transactions are captured as they occur. The total amount
of sales and purchases can be readily ascertained, it also provides an avenue for the
ascertainment of creditors and debtors and the opportunity for ascertainment of
monthly totals.
Longe and Kazeem (2006) stated that subsidiary books can be divided into
six books: sales day book, purchases daybook, return inwards book, return
outwards book, general journal and cash book. These books are used recording
various business transactions.
The existence of businesses both large and small depends upon the volume
of transactions it could coordinate profitably. The extent to which one can carry
out a business profitably depends largely on the management of the available
resources.
To manage resources no matter how little, one must be able to
determine or at least have evidence of how expenditures are incurred and the ways
revenue are realized; the credit facilities offered; the inflow and outflow of cash;
63
evidence of cash deposits and withdrawals; the movement of cash, assets and
goods of the business, and other input and output factor that could affect the going
concern if not given attention (Agboh, 2007).
Asaolu (2005) noted that source documents are those business documents
that facilitate the keeping of accounting records and preparation of accounting
books. Source documents include; invoice, credit note, debit note, petty cash
voucher, statement of account and receipts. An invoice as one the business
document issued by the seller to the buyer to inform the buyer of the exact
quantity, description and price of the goods bought, and the date of transaction. In
the opinion of Agboh (2007), an invoice often serves both the purpose of an
invoice and that of a receipt. It is marked “PAID”, to prove that payment has been
made. Invoice is usually prepared in many copies so that the major accounting
units of the sellers’ organisation will be sent a copy, while the original copy is
issued to the customer.
Credit note is another source document which is issued by a supplier as
evidence of an allowance given to a customer on the request of the customer
through his letter of complaint that some of the goods supplied were defective or
damaged (Agboh, 2007). In effect, it notifies the customer that his account has
been credited with the values of goods supplied which had proven to be defective
or damaged due to wrong packing and or other reasons. Wood and Omuya (2003)
viewed credit note as a document sent by the seller to the customer for reduction in
64
the amount owed by him. Credit note arises because some goods are damaged or
not as ordered. Credit note can be issued to customers and entries will be recorded
in the return inwards book and then credited to customers account.
In the other hand, Pinson (2012) opined that debit note proves that a debit
entry has been made to debtor’s or creditor’s account. A customer or supplier can
be debited for a variety of reasons such as purchases return, wrong quality or
quantity of a product, rate difference, discount commission etc. Agboh (2007)
viewed debit note as a business document prepared by the supplier or seller to
authenticate an undercharge or under bill on a customer’s invoice. This means
that, it is a document issued to create additional charge to what was earlier
invoiced, due to a resulting change caused either through calculation error,
complete omission of some goods, or that the seller wishes to make some
additional charge arising from other expenses carried out.
Similarly, Agbata and Okafor (1999) also explain a debit note as a document
that provides a debtor with information regarding an outstanding debt. The authors
explained further that a debit note can serves as either notification of a debit that
will be invoiced shortly or a reminder of a debt that was previously invoiced and is
currently outstanding.
Statement of account is a document issued by a seller to a buyer, listing
transactions over a given period of time. It usually includes credits and debit to the
account and the resultant balance (www.finance-glossary-com. Accessed March
65
18, 2012). Agbata and Okafor (1999) explained statement of account as a record
of transactions and their effect on account balances over a specified period of time,
for a given account. Example is a bank statement that lists debits and credits that
took place over a relevant time period.
A bank statement is a summary of cash deposits and withdrawals in the bank
account of a customer, issued at intervals to make clear the dealings of a particular
customer with the bank within a particular time frame. Just like statement of
account, it contains bit by bit information on what was paid in, by who, the date
payment was made, who withdrew money, date of withdrawal, cheque number
used for the withdrawal, payments made on behalf of the customer, payment made
according to order placed, charges for bank’s services are usually represented in
the bank statement (Agboh, 2007). Having dealt with source documents, it is
important to now discuss the subsidiary books where information from source
documents should be entered.
All source documents should be retained and filed because they support
entries in the subsidiary books. Subsidiary books according to Wood and Sangster
(2002) are the books where transactions are first summarized in order to reduce
postings to the ledger. Olatunji (2002) defined subsidiary books as the books of
original entry in which events and transactions are initially recorded before being
posted or transferred to the ledger. Favell (1999) reported that subsidiary books
66
are collectively known as books of original entry because all transactions must
passed through the subsidiary books before being posted to the ledger.
Furthermore, the reasons for preparing subsidiary books are as follows: to
know the value of total sales and purchases; to make first entry of transactions; and
to keep track of the people to whom money is owed and of the people who owed
money. Favell (1999) similarly asserted that the usefulness of the subsidiary books
is so great as adjuncts to the ledger than in the business that use them, since the
entries contained in these books are complete and ensures accuracy in the ledger
accounts.
Subsidiary books include: Sales Day Book, Purchases Day Book, Returns
Inward Book or Sales Return Book, Returns Outward Book or Purchases Return,
Cash Book (Favell, 1999). Wood (2003) stated that cash book differ from other
subsidiary books as sit substitute for the cash and bank accounts in the ledger. It is
an integral part of the double entry records, whereas the other books of prime entry
are not. Cash book as defined by Wood is a financial journal that contains all cash
receipts and payments, including bank deposits and withdrawals. The entries in
the cash book are then posted to the general ledger.
Sales journal is one of the subsidiary books in which details of all credit
sales are recorded. Agboh (2007), maintained that sales invoice serves as a source
document from where information required writing up the sales journal are
obtained.
Sales day book contains such information as name of the
67
debtor/customer, items bought, date of the transaction, amount owed. On the other
hand, a purchases day book is a subsidiary book for recording details of credit
purchases.
For the purpose of record keeping, information required for the
preparation of purchases daybook is obtained from the purchases invoice. The
summary of credit purchases is transferred to the appropriate ledger accounts.
According to Agboh (2007), the commitment of transactions and keeping of
records thereto cannot be without mistake. Atimes an over charge, undercharge,
supply of wrong goods specified, over payment, and so forth can be experienced.
When these happen, it calls for additional record in the books of accounts. The
author explained a return inward book as a day book for recording all returns of
goods to the supplier by his customer, resulting from damage or goods not meeting
required specification. On the other hand, when such goods are sent back to the
supplier, a credit note, is expected to be forwarded to the customer by the supplier,
to acknowledge the receipt of such items returned to him, also as a prove of
reduction in the debt owed him. When the credit note is received by the customer,
the accounts staff opens a subsidiary book, or otherwise called the return outward
journal, to record items of transactions in such credit note received.
Longe and Kazeem (2006) upheld that the journal proper or general journal
is another book of prime entry in which are recorded the initial entries in
chronological order. It is a daily record of transactions. Akintelure and Oguobi
(2003) observed that the journal proper is used for the purpose of recording
68
transactions, which by their nature cannot be entered in any other book of prime
entry. It is also used for opening and closing entries, transfer of items or correction
of errors, etc.
Apart from the basic accounting records keeping discussed above, Murray et
al (2011) posited that for store control, cost records must be maintained. Cost
records means books of account relating to utilization of materials, labour and
other items of cost as applicable to the production processing, manufacturing and
other activities of the organisation. Two sets of records are usually maintained.
First is Bin card and the second is store ledger account. Bin cards as explained by
Murthy and Gurusamy(2010), account for quantity only while stores ledger
indicate value also.
Bin card as described by Agbata and Okafor (1999) refers to quantitative
details of receipt, issues and balance. Entries are made immediately on receipt or
issue of a material or item. The cards as explained by the authors are usually kept
attached to the bins in which materials or items of stock are kept. The card also
indicate maximum, minimum and reorder level. The stores ledger is maintained in
the cost accounting department and contains the same information as in bin card
with addition of rate and value of materials. The author opined that the number of
ledger cards is the same as in the case of bin cards, and the two sets are reconciled
when physical inventory is taken. The author gave the reason that the sources of
posting in bin and sores ledger are same (Pinson, 2007).
69
Murthy and Gurusamy (2009) asserted that sometimes, a second quantitative
record is maintained in the stores called stock control cards which are similar to
bin card with additional information as regards stock on order.
The authors
explained further that bin cards are kept attached to bins or sacks for easy
identification of stock. The stock control cards are kept in cabinets or trays or
loose-leaf binders. Advantages of stock control cards according to the author
include: (a) Records are maintained in a compact way, (b) Reference to the stock
records is facilitated, (c) Overall idea of stock holding can be had by running
through the store bins and racks, (d) division of labour between record keeping and
material handling is possible. The stock control cards serve useful purposes in
determining the price at which stocks are valued.
Material requisition form is an important document for both storage control
and cost ascertainment in virtually all cost accounting systems. This document is
usually raised in three copies. One copy will be retained by the originator and the
other two copies are set to store department to allow withdrawal of goods from the
store. The store department will retain one copy to update their own records, and
having completed the quantity issue section, one copy will be send to the store
ledger section (Garison, 2002).
According to Garison (2002) material return note is a document which
records the return to store department of surplus materials no longer required by
the cost centre. The various materials records and cost accounts are to be adjusted
70
to ensure that the cost centre concerned receives credit for the materials returned
while the store account is debited for the returned materials.
Inventory control
Inventory is the total amount of goods and or materials contained in a store
or factory at any given time. Business owners need to know the precise number of
items on their shelves and storage areas in order to place order or control losses.
(Retrieved March 15, 2012 from www.next/levelpurchasing.com/invetory). The
word inventory can refer to both total amount of goods and the act of counting
them. Inventories should be taken on a regular basis in order to avoid running out
of popular items. Inventories should be taken to ensure that the number of items
ordered matches the actual number of items counted physically. Shortages or
overages after an inventory can indicate a problem with theft or inaccurate
accounting practices (Okwo, 1999).
Accounting Standard (AS 2) defined inventory as follows (a) assets held in
the ordinary course of business; (b) assets in the process of production for sale (c)
assets in the form of materials or supplies to be consumed in the production
process or in rendering services.
The Accounting Standard (AS 2) further
described inventories to encompass finished goods produced, or work –in-progress
being produced by the business organisation and materials, maintenance supplies,
consumables and loose tools awaiting use in the production process.
71
Inventories as defined by Pandey (2007) constitute the most significant part
of current assets of majority of small businesses. According to the author, since
most small business maintains large size of inventory, a lot of money is usually
tied to inventory. Inventory as described by Agara (2005), refers to the physical
units of goods that a business trades on or manufactures for sale.
Osuala (2004) asserted that since the typical small business has its largest
investment in inventory, the owners must focus on controlling this investment and
maintaining proper inventory levels. In the view of Agara (2005) stock constitute
the major cost component in most trading and manufacturing small businesses.
Therefore, operators must control the cost of inventory in order to operate
successfully. The author defined cost control as the process of managing the total
system of sock acquisition, conversion, storage and delivery to customers at
minimum cost.
Inventory to many small business owners is one of the more visible and
tangible aspects of doing business. Raw materials, goods in process and finished
goods all represent various forms of inventory. Each type represents money tied
up until the inventory leaves the organisation as purchased products (US Small
Business Administration Publication, 2011). In a literal sense, inventory refers to
stock of anything necessary to do business. These stocks represent a large portion
of the business investment and must be well managed in order to maximize profits.
In fact, many small businesses cannot absorb the types of losses arising from poor
72
inventory management.
Unless inventories are controlled they are unreliable,
inefficient and costly (Agbata and Okafor, 1999).
Osuala (2004) stated that many small businesses rely on an effective system
of purchasing and inventory control to maintain an adequate level of profitability.
The author explained further that a key factor for success in small business is the
owner’ ability to establish a sound purchasing and inventory control procedure.
Inventory control is concerned with establishing and maintaining optimum
stock levels.
Stocks represent an investment of financial resources and the
opportunity cost may be measured by references to the next best use of the funds as
invested. The author asserted that organisdations held stocks, however because of
the benefit attached to the availability of supplies. In case of raw material stocks,
minimum stock levels are required to prevent dislocation in the production process
and consequential loss of income (Bessong, 2005). Inventory is the term used to
describe the assets of business organisation that are intended for sale in the
ordinary course of business, which are in the process of being produced for sale,
or are to be used currently in producing goods to be sold (Osuala, 2004). The
author further described inventory as a list of goods or products that is held in
stock. Keeping inventory takes a lot of time, but failure to do so could result in
major financial disaster.
Agara (2005) submitted that having no inventory or having wrong inventory
can lead to many problems. Since inventory is reflected in the company’s books, a
73
business owner may make decisions based on the number of inventory the owner
sees in the books. If the number is wrong, a wrong decision could be taken that
may be costly.
The author submitted that, in order to prevent such a wrong
decision, there are ways to keep proper inventory that any sized business can use.
Pandey (2006) classified inventory as: (1) merchandise and (2) manufacturing
inventory. Pandey explained those merchandise inventories are goods available for
sale to customers. He concluded that those merchandise inventories are the readyto-sell inventory of trading concerns or merchandising firms. The author explained
manufacturing inventory in the other hand as goods that need to be produced in
order to sell.
According to Lucey (2009), inventory control means keeping the overall
costs associated with having inventory as low as possible without creating
problems. This is also sometimes called stock control. The author asserted that, it
is an important part of any business that must have a stock of products or items on
hand. Correctly inventory control is a delicate balance at all times between having
too much and too little in order to maximize profits. The costs associated with
holding stock, running out of stock, and placing orders must all be looked at and
compared in order to find the right formula for a particular business (Murthy and
Gurusamy, 2009).
Agbata and Okafor (1999) opined that inventory control is the process of
efficiently overseeing the constant flow of units into and out of existing inventory.
74
This process as contended by the authors usually involves controlling the transfer
in and out of units in order to prevent the inventory from becoming too high, or
dwindling to levels that could put the operation of the company into jeopardy. The
author added that effective control of inventory also seeks to control the cost
associated with the inventory.
Inventories have been defined as goods and services that businesses hold in
stock. Inventory can also be categorized basically into two namely merchandising
and manufacturing inventory. Merchandising inventory are, those purchased for
the purpose of resale by retailers or wholesalers.
Manufacturing inventory according to Agboh (2007) is classified into: raw
materials inventory, work-in-process inventory and finished goods inventory.
Pandey (2006) stated that raw materials inventory consists of goods and materials
that ultimately will become part of the manufactured product but have not yet
entered the production process.
Work-in-process inventory on the other hand
consists of units in the production process that require additional work or
processing before becoming finished goods. Finished goods inventory consists of
units that have been completed and are available for sale at the end of the
accounting period.
Garrison (2002) postulated that the stock levels in the bin card are meant to
ensure effective control of stocks in the store and to avoid excessive stock,
wastages, work stoppages etc. The levels could be defined as follows: maximum
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stock level is the upper level of the inventory and the quantity that must not be
exceeded without specific authority from the management of the organisation.
While minimum stock level is the lowest level to which the inventory should be
allowed to fall and it is given by re-order level – (Average usage x Average Reorder period). Average stock level is also given by maximum stock level plus
minimum stock level divided by 2.
Other stock levels as enumerated by Garison include: Re-order level or
order level which is the level to which stock is to be allowed to fall before an order
for further supplies is placed and it is given by Maximum usage multiply by
maximum Re-order period. Re-order period or lead time is the time taken between
the placing of an order and the receipt of the materials. On the other hand the reorder quantity is the economic order quantity or simply the normal order. It is the
quantity that minimises the total cost of order and the holding of stock.
Manufacturing inventories consists of raw materials, finished goods and work in
progress.
Agara (2005) suggested some of common areas in which to exercise
inventory control as follows:
1)
Raw materials availability: There must be enough raw materials inventory
on hand to ensure that new jobs are launched in the production process in a
timely manner, but not so much that the organisation is investing in an
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inordinate amount of inventory. The key control designed to address this
balance is ordering frequently in small lot size from suppliers.
2)
Finished goods availability: A business organisation may be able to charge a
higher price for its products if the organisation can reliably ship them to
customers at once. Thus, there may be a pricing premium associated with
having high levels of finished goods on hand.
However, the cost of
investing in so many inventories may exceed the profits to be gained from
doing so, therefore, inventory control involves balancing the proportion of
allowable back orders with a reduced level of finished goods on hand. Some
business organisations make use of just-in-time manufacturing.
3)
Work-in-progress: It is possible to reduce the amount of inventory that is
being worked on in the production process, which further reduces the
inventory investment. This can involve a broad way of actions, such as
using production cells to work on sub-assemblies, shifting the work area into
a smaller space to reduce the amount of inventory travel time, reducing
machine set up times to switch to new jobs and minimizing job sizes.
4)
Reorder point: A key part of inventory control is deciding upon the best
inventory level at which to order additional inventory. If the reorder level is
set very low, this keeps the investment in inventory low, but also increases
the risk of stock-out, which may interfere with production process or sales to
customers. The reverse problem arises if the reorder point is set too high.
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The organisation can make use of material requirement planning system to
order only enough inventories for expected production level.
5)
Outsourcing: Inventory control can also involve decisions to outsource some
activities to suppliers, thereby shifting the inventory control burden to the
suppliers.
Okwo (1999) stated that to maintain an in stock position of wanted items and
to dispose of unwanted items, it is necessary to establish adequate controls over an
order and inventory in sock. The author opined that stock levels are maintained in
such a way that there is no overstocking, so that chances of loss through damage,
deterioration in quality, risk of obsolesce etc are avoided along with unnecessary
blocking of money or payment of interest on borrowed funds. The author also
agreed that there shall be no stock-out situation, leading to interruption of
production and loss of sale and profit. Murray (2011) identified various stock
levels that managers should be concerned with to include: Reorder level, minimum
level, maximum level.
Murray, Garry and Bving (2011) described stock reorder level as that level
at which the business owner or the store keeper initiates requisition of fresh
supplies of goods or materials. The authors opined that reorder level takes into
account the maximum consumption during lead time and unexpected delay in
receiving fresh supply. Murray et al explained lead time as time necessary to
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obtain delivery of goods from date of order. Reorder level is therefore calculated
as maximum reorder period multiplied by maximum consumption.
Minimum stock level represents a level which the stock will reach with fresh
delivery of goods provided the fresh delivery is made within the reorder period and
usage remains normal during the period. The authors submitted that stocks should
not be allowed to fall below the minimum level. Minimum stock level is therefore
computed as reorder level less normal consumption during normal reorder period.
On the other hand, maximum stock level represents stock level above which stock
should not be allowed to rise. The authors explained that the main purpose of
maximum stock level is to ensure that money is not tied up in inventory
unnecessarily. The maximum stock level is therefore computed as reorder level
plus reorder quantity minus minimum consumption during reorder period.
Agara (2005) posited that stock control is a stock management process
which is concerned primarily with identifying needed stock, quality, and quantity,
identifying suppliers and the best prices obtainable, identifying the best
conveyance method to reduce cost, breakage, identifying the demand pattern to
avoid over or under stocking in order to minimize stock holding cost, ensuring that
stock is properly secured by providing a secured storage under the control of
trusted individuals and installation of an efficient internal control system with
regards to the requisition, issuance and usage of stores through proper
documentation of items in the stores.
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According to Pandey (2007) the issue of stock control arises because small
businesses must hold inventories. Agara (2005) agrees that there are three motives
for holding inventories by small businesses. These motives include: transaction
motive which help the small business operator to meet demand for stock items.
Precautionary motive enables the operator to hold inventories to reduce the effect
of fluctuations in prices due to charges in demand and supply forces. The author
explained that buffer stocks may be held to avoid stock-out and loss of customer
patronage. Speculative motive as explained by Agboh (2007) is the decision by
the operator to increase or decrease inventory level to take advantage of price
fluctuation.
Murray et al (2011) enumerated some control techniques that may be used
by small businesses in controlling inventories.
Perpetual inventory system is
defined by CIMA in Murray et al (2011) as a system of records maintained by the
controlling department, which reflects physical movement of stocks and their
current balance. In other words, it is a technique of controlling inventory by
maintaining stock records, such as bin cards in stores and stores ledger in accounts,
in such a manner that the stock balance is available at any point in time. The
authors explained that under the perpetual inventory system, stores balance is
recorded after each transaction of receipt, issue or transfer.
The success of perpetual inventory system depends on the following: (a)
maintenance of bin card and stores ledger up-to-date (b) reconciliation of quantity
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balance shown by bin cards with that in stores ledger (c) continuous verification of
physical stock with bin card quantity (d) reconciliation of discrepancies arising out
of physical verification, as well as comparison with stores ledger. Pandy (2007)
submitted that checking of stock by physical verification is an essential feature of
stock control.
Such checking according to the author may be periodic or
continuous. Periodic stock verification system is a system of stock taking that is
carried out at a given interval such as annually, quarterly, half yearly, monthly or
weekly. Okoro (2006) explained continuous stock taking as consisting of counting
and verifying the number of items daily throughout the year. The author explained
that under continuous stock- taking, the stock verifier counts or weighs or
measures the physical quantity of a particular item and records them in the bin card
or sock verification sheet.
The life span of every business venture, especially the buying for sale
business, depends largely and solely on its inventory. Inventory is referred to all
the goods in the sore either bought or manufactured for the purpose of resale at a
profit. Often most business at the end of a trading period do not sell all stock of
goods, hence they may carry such remaining stock forward to the future trading
period (Agboh, 2007).
Agbata and Okafor (1999) posited that the opening sock of a business in the
current year may not serve enough to meet the customers’ demand during the
year’s trading period. The authors explained further that relationship existing
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between the values of opening stock, closing sock, the size of sales and gross
profit, is what makes inventory valuation a very important aspect of financial
reporting.
Inventory valuation
Agboh (2007) asserted that, the accounting policy adopted by a firm
determines to a large extent whether its stock value will be higher or lower than
that of its counterparts. The author added that accounting policy in place may
suggest that the current market rate, the average of purchase prices or the historical
price, be used in valuing the firm’s stock. Similarly Horngen and Harrison (2007)
noted that there are several methods of valuing inventory. The authors postulated
further that whichever method adopted suggest different values depending on the
nature, economic, situation. In an inflationary economy, a firm that adopts the
current market price will have a higher stock value than that using historical rate,
while the reverse is the case for deflationary economy.
Inventory valuation therefore refers to assigning product costs to the
inventory. Inventory valuation is a statement that provides information about the
value of goods held inventory.
Inventory according to Brag (2010) provides
monetary value for items that make up their inventory. Brag also noted that since
inventories are the largest asset in small business organisation, proper
measurement of them is essential to assure accurate financial statements.
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Inventory valuation records can be used in accounting, valuing the organisation
and making business decisions.
There are a number of factors to be considered in valuing materials issued
for use from the store where purchase prices are constant over a long period, and
there is no variation in quantities purchased, there would be, little or no difficulty.
In practice, prices fluctuate due to a number of reasons.
Such reasons are:
inflation, changes in world commodity prices, buying from different sources,
differences in quantity, discounts etc. It is clear that there may be a number of
identical materials in the stock bought at different prices. When one of these
materials is issued, it is necessary to determine the value at which it should be
charged (Agbata and Okafor, 1999).
The closing stocks of finished goods, work-in-progress, raw materials, etc
need to be valued for reflection in the balance sheet, as a current asset. A material
valuation method has to be used for the determination of the value of closing stock
of different forms of materials. There are many methods of valuing stock. The
most popular methods are discussed here. Statement of Accounting Standards
(SAS 4) on stock recommends valuation methods like First-in-First-Out (FIFO);
Weighted Average (WA), Specific Identification (SI), Last-in-Last-Out (LIFO);
Standard Cost (SC), Based Stock (BS), Last Purchase Price (LPP) and Adjusted
Selling Price (ASP) or Retail Inventory Method (RIM) for use by businesses.
However, the Statement of Accounting Standard (SAS4) lays more emphasis on
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three methods. These are: (a) First-in-First-Out (FIFO), (b)
Last-in-First-Out
(LIFO);and(c) Weighted Average Price (WAP).
According to Agbata and Okafor (1999) FIFO means first in, first out
implying that goods should be sold or issued in the order in which they were
bought or procured. The authors cited example that goods bought in the 3rd week
of a particular month should not be sold/issued unless those bought in the first and
second week of that same month have been fully sold off. The benefit of the FIFO
method in case of stocks which have expiring dates, old stock would be sold out
before the date and will be left with currently procured goods.
Under FIFO, inventories are valued at current prices. This is because goods
bought first have been sold leaving those goods bought last. Consequently, FIFO
tends to overstate profit level during inflation and does the opposite during
deflation (Agbata and Okafor, 1999). On the other hand, LIFO means last in, first
out, which implies that goods purchased last should be first sold. For instance,
inventories bought in the second week of a particular month should be sold before
those procured in the first week of the month. This method therefore, does not
consider the fate of goods with expiring dates (Harrison and Horugren, 2007).
Under LIFO, inventories are valued at historical cost and sold at current
prices. This is logical according to Abata and Okafor (1999) because goods bought
last have been sold, leaving the ones bought first. This method therefore tends to
understate profit level during inflation and does the reverse during deflation.
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According to Bessong (2005) average cost method of stock valuation
assumes that inventories are sold in batches and that each batch taken from the
store is composed of uniform quantities from each supply in stock at the date of
sale. The author explained that on each receipt of goods, the average cost of goods
held in stock is re-calculated. Any subsequent sales are then made at the price
until a further receipt of goods necessitates a recalculation of average cost of goods
held. Agara (2005) stated that goods sold during an accounting period seldom
correspond exactly to the goods bought during that period. As a result, inventories
either increase or decrease during the period. Businesses must value inventories in
order to allocate the cost of all the goods available for sale between the goods that
were sold or used and those that are still on hand. The cost of goods available for
sale or use is a sum of the cost of goods on hand at the beginning of the period and
the cost of goods at the closing of accounting period.
Pandy (2007) asserted that valuing inventory requires determining the
following (1) the physical goods to include in inventory (2) the cost to include in
inventory (3) the cost flow assumptions to adopt. A primary issue in accounting
for inventory is the determination of the values at which inventories are carried in
the financial statements until the related revenues are recognized. This standard
deals with the determination of such value, including ascertainment of cost of
inventories and any write down thereof to the net realisable value (Accounting
Standard 2). According to the Standard, inventories are assets: (a) held for sale in
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the ordinary course of business (b) in the process of production for such sale or (c)
in the form of materials or supplies to be consumed in the production process or in
the rendering of services. Net realizable value on the other hand is the estimated
selling price in ordinary course of business less the estimated costs of completion
and the estimated cost necessary to make the sale.
Horngren and Harrison (2007) posited that inventories encompass goods
purchased and held for resale, for example merchandise purchased by a retailer and
held for resale, computer software held for resale, or land and other property held
for resale.
Inventories also encompass finished goods produced or work in
progress being produced, by the enterprise and include materials, maintenance
supplies, consumables and loose tools awaiting use in the production process
(Statement of Accounting Standard 2).
Agbata and Okafor (1999) maintained that materials issued from stores
should be valued at the rate they are carried in stock. Materials are valued at cost
and entry in the stores ledger made with receipt. The authors further explained that
different lot of materials may be received at different prices. Hence when issues
are made from stock, it may happen that materials from more than one lot may
have to be issued. The price at which various materials in stock will be issued
necessitated that inventory valuation be done.
Murthy and Gurusamy (2009) stated that the value of stock has an effect on
profit for the year. The authors stated that stock can be valued at either; cost,
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which means the purchase price plus any other cost incurred to bring the product to
its present location and condition, or net realizable value. The net realizable value
on the other hand is the estimated selling price less the estimated costs to get the
product into a condition necessary to complete the sale.
Similarly, Agbata and Okafor (1999) stated that stock valuation is normally
made at the lower of these two values, i.e at the lower of cost and net realizable
value.
This valuation method is recognized by the International Accounting
Standard 2 on inventories. The valuation applies the prudence concept and the
principle of inventory valuation which states that, if cost price is lower than selling
price, stock should be valued at cost price but if the cost price is higher than selling
price, stock should be valued at selling price or net realizable value.
Horngren and Harrison (2007) asserted that, it is not easy to value stock
because of the difficulty in finding out the cost price of stock. This is especially
when quantities of particular stock items are continually being bought at different
prices and sold.
According to matching principle, the expenses during an
accounting period should match the income earned during the accounting period.
Agbata and Okafor (1999) posited that since goods are sold and bought
continuously, the amount of inventories that should be carried forward to the next
accounting period should be determined so that current year’s revenue is matched
with the current year’s cost of goods sold. The authors further stated that any error
in valuation of inventory will affect not only the current year’s profits but also the
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next year’s profit because the closing stock of current year is the opening stock of
the next year.
According to Generally Accepted
Accounting Principles (GAAP),
inventories should be valued at cost. Cost refers to cost of acquisition for raw
materials duties, taxes, freight and other expenses directly related to such
purchases. Similarly any discounts rebates on such purchases should be reduced.
On the other hand finished goods costs include cost of raw materials plus cost of
conversion of raw materials consisting of direct expenses like labour costs as well
as indirect manufacturing cost like power, water fuel, factory rent, factory
insurance etc. Work-in-process is also valued at cost depending upon the state of
completion of labour and overheads which is determined by the production
department (ICAN Pack Study Material, 2010). Agboh (2007) asserted that, the
basic accounting convention of conservatism or prudence stipulates that good
accounting practice follow a procedure that tends to understate profits or overstate
losses as precaution against overdrawing especially from business capital. Going
by the accounting principle of prudence, a preferred method to be applied should
always be that which will reflect lower profit.
In all, since stock figures are often a large part of the assets of a business and
contribute to a large extent in profit determination. Managers have to be cautious
in selecting the valuation method to apply. Managers should always keep in line
with the accounting principle of prudence to avoid overstatement of profit which
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may result in capital being mistakenly withdrawn as profit, and must be consistent.
Agbata and Okafor (1999) noted that price changes in an unstable economy
determine which method of stock valuation to be used as a method which reflects
less profit in time of inflation may in time of deflation reflect high profit.
Price Determination
Osuala (1998) defined price as the amount of money which is needed to
acquire in exchange of some goods and services. Price as defined by Modern
(1998) is the value or sum of money at which business organisation agree to carry
out an exchange of transaction. Hasty and Reardon (2007) also defined price as
the value assigned to something bought, sold or offered for sale expressed in
monetary terms. Furthermore, Kotler and Armstrong (2001) defined price as the
amount of money customers have to pay to obtain the product.
To set prices effectively, a business organisation must determine the role
price will play in the business. Thus Hasty and Reardon (1997) suggested that
operators of businesses of all sizes must set prices of their goods or services such
that:
(a)
They sell at a satisfactory rate
(b)
Inventory costs and expenses are covered
(c)
A desired profit is made
(d)
Customers are treated fairly.
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Modern (1999) stated that prices at which exchange of goods and services
are carried out may either be fixed to the buyer or negotiable. According to Obi
(2011) product pricing requires a lot of guesswork. Every firm wants to make
much profit as possible from its products. The author contended that, if prices are
set too high, consumers will not buy. On the other hand, if the price is too low, the
business might not make all the profits it would or might not make profits at all.
Obi (2011) asserted that cost is a basic factor in determining price. The
author explained that business may price their products at cost plus a fixed
percentage. The above method of fixing price is known as mark-up. Osuala (1998)
opined that if businesses must do well, operators must set pricing objectives which
include target return on investment, to improve market share, prevent competition
and maximize profit.
McGoldrick and Greenland (2004) gave a general prerequisite for business
success as ability to produce and sell goods for which customers are willing to pay
a price which exceeds the cost of the product and which customers will prefer to
those of competitors. Kotler and Keller (2005) stated that whatever the specific
objectives, businesses that use price as a strategic tool are likely to profit more than
those who simply let costs or the market determine their pricing.
Bessong (2005) noted that every business organisation aims at maximizing
profit. Total cost of production constitutes the basis on which selling price is fixed
by adding a margin of profit. The author explained further that cost accounting
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furnishes both total cost of production as well as cost incurred at each and every
stage of production. Other factors can be taken into consideration before fixing
price such as market conditions, the area of distribution, volume of sales etc. But
cost plays the dominating role in price fixation.
Horngren, Datar, Foster, Rajan and Ittner (2009) noted that some business
organisations make a tremendous effort to analyze their costs and prices. The
authors stated further that some business owners are aware that if the price is too
high, that the sale will be lost to a competitor. But if price is too low, the firm will
not meet its target. The authors submitted that some business owners fall into a
rut, as they continue to price their products the way they always have in the past,
even if it does not make sense.
Horngren et al (2009) opined that how business organisations price their
goods or services ultimately depends on the demand and supply for it. The authors
stated three influences on demand and supply as: customers, competitors and costs.
Customers influence price through their effect on the demand for a product or
service, based on factors such as the features of a product and its quality.
Competitors offer alternative or substitute products that can affect demand through
lowering prices.
Cost influence prices because they affect supply. Generally, as businesses
increase supply, the cost of producing each additional unit initially declines but
eventually increases. Businesses sell products as long as the additional revenue
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from selling more units exceeds the additional cost of producing them. The lower
the cost of producing a product, the greater the quantity of product the business is
willing to sell (Horngren et al, 2009)
Lucey (2009) noted that managers who understand the cost of producing
their goods, set prices that make the goods attractive to customers while
maximizing operating incomes. Bessong (2005) noted that organisations can use
either cost based approach in pricing or market based approach in pricing. The
author explained that both approaches consider customers competitors and costs
but depends on which comes first. The author added that managers sometimes use
cost-based approach in the long run instead of a market-based approach. The
general formula for setting a cost-based price adds a mark-up component to the
cost base to determine a prospective selling price.
Bessong (2005) stated that most businesses are interested in the mark-up
cost which is the difference between the selling price and its cost. The mark-up is
usually expressed as a percentage of cost. Bessong described pricing decision as a
routine and strategic decision which deals with the determination of the appropriate
value to be attached to goods or services Bessong (2005) added that price must be
able to respond with market pressure to ensure continuity and equally the pricing
must be in line with organizational objective or goal.
Lucey (2002) opines that business organisation may be concerned with two
types of pricing decisions which include: Internal Pricing and External pricing.
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The author explained that external pricing is meant for those sales external to the
firm, that is, to its customers. While those relating to prices used for internal
transfers between parts of the same organisation is referred to as internal pricing.
The central feature of economic model is the assumption that the firms will
attempt to set the selling price at a level where profits are maximized. If a business
raises the price of a product, unit sales ordinarily fall. As a result of this fall,
pricing is a delicate balancing act in which the benefits of higher revenues per unit
are traded off against the lower volume that results from charging higher prices.
The sensitivity of unit sales to changes in price is called the Price Elasticity of
Demand (Okwo, 1999). Price elasticity is very crucial in determining prices.
Managers should set higher mark up over cost when customers are relatively
insensitive to price i.e. demand is elastic (Bessong, 2005).
According to Lucey (2009) pricing decision suffers from lack of accurate
and relevant information.
Setting prices for goods and services involves an
interesting interaction of several factors. The price must be sufficient to exceed the
product and period costs and earn a desirable profit. For normal sales to external
customers, most companies are unable to unilaterally set prices.
Prices are
typically set in these competitive markets by the laws of demand and supply. If a
business manufactures a product unique to customers specifications, or if the
company has a patent to its product, then the organisation can set its own price.
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As discussed earlier, the organisation can apply the proper mark-up, given the
competitive market conditions and other factors, to set its target – selling price.
Theoretical Framework
Going Concern Theory
Canning (1929), in his theory presents a conceptual framework for asset
valuation and measurement founded explicitly on future expectation. A going
concern theory states that a business will continue to operate for an indefinitely
long period of time. In most cases, the accounting system will treat value on the
assumption that the business will continue trading and operate in the future and not
cease at the accounting date. Here, it is assumed that business organisations like
small scale businesses will operate in perpetuity. Except on liquidation, a business
enterprise is expected to operate in the unforeseeable future.
The going concern theory is related to this work because, operators of small
scale businesses invest in business to make profit. If a business must continue in
its operation therefore, it is bound to make profit continually. For any business to
make maximum profit, it must manage its resources well.
Therefore small
business operators should possess the requisite skill in record keeping, stock
management and price determination because they are closely tied to profitability.
Any business that ceases to make profit consistently over a period of time is
bound to liquidate and hence ceases to be a going concern.
Entity Theory
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William (1922) postulated in his entity theory that the affairs of a business
are to be treated as being quite separate from the non-business activities of its
owner(s). The items recorded in the books of the business are therefore, restricted
to the transactions of the business.
The entity theory suggests that a business organisation should be treated as a
separate entity from the owner. That is, if the money in the business is used to pay
for owner’s expenses, it must not be treated as business expenses rather, should be
charged to the owners drawing account. The entity theory has a relationship with
the present study, because even though the operators of small businesses provided
the finances for running their business, they are two distinct entities. Therefore
when a small scale business operator is unable to pay his personal bills, it does not
affect the business. Moreover small business operators should keep the record of
business transactions different from the personal transactions in reporting the
affairs of the business operation.
Review of Related Empirical Studies
Okoro (2006), conducted an empirical research on strategies for improving
the financial management practices of small and medium scale enterprises in Niger
Delta of Nigeria. The study was meant to address the financial management
constraints faced by entrepreneurs, such as lack of management and
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entrepreneurial skills. The main purpose of the study was to identify the strategies
for improving the financial management practices of small and medium scale
enterprises in the Niger Delta. The study adopted survey design and the entire
population was used for the study. Mean and standard deviation were used to
answer the research questions while t-test and analysis of variance were used to
test the hypotheses.
The major findings of the study among others included: the respondents
agreed that 10 out of the 15 sourcing of funds strategies are ways for enhancing
their sourcing of funds; they also agreed that 8 out of 14 control strategies are ways
for improving financial management. It was therefore concluded that financial
management practices can be effectively improved through the application or
adoption of the identified strategies. It was recommended that Federal Ministry of
Industry should encourage practicing entrepreneurs, to gain relevant knowledge in
financial resource management.
Okoro’s
study is related to the present study because sound financial
resources management is an integral part of accounting which demands accurate
and up to date accounting record keeping. This also requires that managers will
possess good accounting skill. The present study also differs from Okoro’s study
because it deals on cost accounting skill needs of small business operators while
the former deals on financial management.
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Mfam (2009) conducted a study on Application of Accounting Ratios in
Measuring Solvency of small scale industries in the manufacturing sector of Cross
River State.
The major purpose of the study was to determine the extent of
application of small scale industries in the manufacturing sector of Cross river
state. The study adopted descriptive survey design. The population for the study
consists of 667 respondents made up of 345 accounting staff working in palm oil
processing factories and 159 accounting staff working in bread baking factories.
The entire population was studied.
Data were collected using structured questionnaire. The collected data were
analysed using weighted mean and standard deviation to answer the research
questions while ANOVA statistic was used to test the hypotheses. The major
findings of the study revealed that the inability of the management of small scale
industries to apply accounting ratios in measuring solvency and operational
efficiency of their ventures, may be responsible for the preponderance of business
failure.
The relationship of the study and the present study lies on the fact that both
focus on small scale business and the need for improving on accounting practices
for business survival. Both studies also differ because Mfam’s work, even though
studied small scale business, the emphasis was on Application of Accounting ratios
for Measuring Solvency of small scale manufacturing industries in Cross River
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State. The present study aims at determining the cost accounting skill needs of
small business operators in Anambra State.
Owoh (2006) conducted a study on financial accounting and business failure
in Nigeria using some selected incorporated business organizations in Enugu state.
The study aimed at addressing the problem of business failure resulting from
financial accounting process. Data were collected using questionnaire, personal
interviews and secondary sources. The researcher used mean, percentages and chisquare for analysis.
The findings revealed that most financial statements and accounting records
are often manipulated and therefore unreliable. It was discovered that auditing of
financial statements though legally mandatory, has often failed to forestall the
manipulation of accounting records and financial statements characterizing
business organization.
Finally, it was recommended that workshop should be
organised for the workforce to educate them on more modern approaches of
keeping accounting records. Thus Owoh’s study has created a gap for the present
study because good record keeping requires a skill and need for cost accounting
which is mainly for internal reporting.
Both studies are related because cost
accounting and financial accounting are the two main branches of accounting.
Both studies also differ because Owoh’s study specifically dealt with financial
accounting whereas the present study focuses on cost accounting.
Summary of Reviewed Literature
98
The literature were reviewed in line with the specific purposes of the study.
The reviews were organized under conceptual, theoretical and related empirical
studies. The reviewed literature related to this study revealed that small businesses
constitute the most viable and veritable vehicle for self-sustaining and industrial
development of any nation. The review has shown that small businesses contribute
to national development through job creation, poverty reduction, and utilization of
local raw materials and the use of indigenous technology among others. The
review also revealed the collective efforts of government through its agencies
toward the development and sustenance of the SMEs sub-sector. Government has
also adopted various financial policies to assist in the development of SMEs lead
private sector. Authors agreed that accounting skills are critical to the survival of
small business operation. Cost accounting skills are not left out because cost
accounting is that branch of accounting that provides information to management
for decision making.
Therefore record keeping, inventory control, inventory
valuation as well as price determination are integral part of cost accounting which
the operator must possess the skills needed for good practices.
There is a unanimous agreement by authors that accounting record keeping
is critical for business survival. The authors opined that most small business
operators do not keep records of their business transactions and some who tried to
do so, keep haphazard records. Improper record keeping and not keeping record at
all have been identified as the major challenges facing most small business
99
operators. This is because business decisions are dependent on solid and sound
record of business transactions.
The literature also revealed that the largest investment made by small
business is in the inventory. Therefore, the authors agreed that, there must be
adequate control measures to guard against excessive accumulation of inventory or
running out of stock. Hence the two conditions will hamper smooth operation of
business. The former will result to money being tied up unnecessarily and the later
will amount to loss of customer patronage and not making profit.
Inventory
control has been identified as one of the major areas in which skill is needed.
The authors reviewed also observed that price determination is one of the
specific aspects of business operation that requires skill. The literature further
revealed that operators do not know how to set the prices of their products. Many
operators either set their prices too high or too low and these conditions either
result to not maximizing profit. It was therefore agreed that cost information is
relevant to these business for good price determination. Furthermore, the review of
empirical studies related to the present study revealed that researches were
conducted on different components of cost accounting but with little or no
information in record-keeping skills, inventory control skills, inventory valuation
and price determination skills in accounting practices adopted by small business
operators.
None of the studies was carried out to determine the cost accounting
100
skill needs of small business operators for better business performance and
survival, which is the thrust of this research work.
CHAPTER THREE
METHODOLOGY
101
This chapter presents the procedures to be adopted for conducting the study.
They include the design of the study, area of the study, population for the study,
sample and sampling techniques for the study, instrument for data collection,
validation of the instrument, reliability of the instrument, method of data collection
and method of data analysis.
Design of the Study
The study adopted descriptive survey research design. According to Osuala
(2005) survey research helps the researcher to identify present conditions, present
needs as well as information on which to base sound decisions. The author further
stated that survey research focuses on people, the vital facts of people, and their
beliefs, opinions, attitudes, motivation and behavior. Survey design is therefore
considered most appropriate for this study because it seeks opinions of respondents
on cost accounting skills needs of small business operators.
Area of the Study
The study was carried out in the three senatorial districts of Anambra State.
They include: Anambra Central, Anambra North and Anambra South.
The
researcher chooses Anambra State as the study area because the state is generally
known to be a business area. However, the rate at which some of these businesses
fail is quite alarming. Hence the need to determine the skills needs of these
operators in order to reduce failure rate and increase business performance. This is
to ensure that these operators will continue in their role of employment creation
102
and poverty reduction in the state since majority of its citizens engage in small and
medium scale businesses.
Population for the Study
The population for this study consists of 280 registered small business
operators in Anambra State comprising 198 operators in the manufacturing sector
and 82 operators in construction sector. The population for this study was obtained
from Anambra State Ministry of Commerce and Industry Awka (SME Unit).
Sample and sampling Technique
No sample was drawn since the population was manageable. Therefore the
entire population was used for the study.
Instrument for Data Collection
A structured questionnaire on cost accounting skill needs for small business
operation on a five point bi-polar scale was used to collect information from
respondents. The questionnaire items were generated based on the information
gathered from the review of related literature. The instrument contains 56 items,
and was divided into five sections (A, B, C, D and E). Section A contained items
designed to obtain personal information from the respondents.
Options are
provided to enable respondents check (P) the one that suits their opinion.
Section B of the instrument comprised 15 items (1-15). These items were
designed to determine the record keeping skills possessed by small business
operators. Similarly, section C contained 16 items (16-31). These items were
103
designed to determine the inventory control skills possessed by small business
operators.
Section D of the questionnaire, on the other hand contained 13 items (3244).
These items were designed to determine the inventory valuation skills
possessed by small business operators. Finally, section E contained 12 items (4556) designed to elicit information on price determination skills possessed by small
business operators.
Items in the questionnaire were structured such that the
respondents express opinions on the importance and level of skills possessed on
record keeping, inventory control, and inventory valuation and on the price
determination.
The response categories for sections B, C, D and E along with their
numerical values are as follows:
Very Highly Important/ Very Highly Possessed
= 5
Highly Important/ Highly Possessed
=
4
Averagely Important/ Averagely Possessed
=
3
Little Important/ Little Possessed
=
2
Not Important/ Not Possessed
=
1
Validation of Instrument
The questionnaire was subjected to face validation by three experts. Two
experts from the Department of Vocational Teacher Education, University of
104
Nigeria, Nsukka and one expert from the Internal Audit Unit, University of
Nigeria, Nsukka. According to Uzoagulu (1998) face validation has to do with
checking to ascertain the degree to which a test appears to measure what it intends
to measure.
The experts were provided with the title of the study, purpose of the study,
the research questions and hypotheses to be tested. They were asked to study the
instrument, assess whether items in the instrument were relevant, clearly stated
with appropriate instructions and capable of eliciting the information needed for
the study. Based on the suggestions and recommendations of the experts, some of
the items were either modified or removed. All the comments by validates were
carefully considered and incorporated in the final draft of the questionnaire.
Reliability of the Instrument
The reliability of the instrument was determined using Cronbach Alpha.
Fifteen copies of the research instrument were administered on similar respondents
in Enugu state for trial testing of the questionnaire. The choice for Cronbach Alpha
is because the response categories are not dichotomously scored. The Cronbach
Alpha coefficient of 0.78 was obtained for record-keeping skills, 0.83 for inventory
control skills, 0.80 for inventory valuation skills while 0.75 was obtained for price
determination skills of the small business operators.
Method of Data Collection
The researcher with the help of three research assistants administered the
questionnaire by hand. This was to ease administration and collection of the
105
instrument from the respondents. The research assistants were briefed on how to
administer the questionnaire in order to elicit the correct responses from the
respondents.
Method of Data Analysis
The data collected were analysed using mean, standard deviation and
correlated-t to answer the four research questions. Real limit of numbers was used
to interpret the mean as follows:
Very Highly Important/ Very Highly Possessed = 4.50 – 5.00
Highly Important/ Highly Possessed
= 4.00 – 4.99
Averagely Important/ Averagely Possessed
= 3.00 – 3.99
Little Important/ Little Possessed
= 2.00 – 2.99
Not Important/ Not Possessed
= 1.00 – 1.99
To determine the skills in which respondents need to fill gaps or have needs,
the correlated-t coefficients were computed using means on the importance scale
and on skill possessed scale.
A skill is needed if the obtained correlated-t
coefficient is significant at 0.05 level of significance and a skill is not needed if
otherwise.
The t-test statistic was used to test H013 and the other twelve hypotheses
were tested using Analysis of Variance (ANOVA). The null hypotheses of no
significant difference were tested at 0.05 level of significance. Null hypotheses
were accepted if the calculated t and f-ratio are less than the critical value but were
106
rejected where the calculated t and f-ratio are equal to or more than the critical
value.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
This chapter presents the analysis of data generated in the study. The data
presentation and analysis were based on the research questions and hypotheses
formulated for the study.
Research Question 1
107
What are the perceived level of importance and expressed possession of
record-keeping skills by small business operators?
The data for answering research question one is presented in table 1 below
95
108
Table 1
Correlated t-test of the Mean Ratings of Respondents on Perceived Importance and Expressed Possession of Record-keeping skills.
Perceived Importance
S/N
1
Skill Statement
Use double entry to record transactions
Expressed Possession
VHI
HI
AI
LI
NI
X1
SD1
VHP
HP
AP
LP
NP
X2
SD2
141
89
39
-
-
4.37
0.73
-
129
60
27
53
2.99
1.17
C-t
2.57
ttab
1.96
Decision
Sig
Sig
2
Record all cash transactions in the cash book
165
38
66
-
3
Debit cash sales in the cash book and post entry to credit side of
the ledger
154
76
39
-
Credit cash purchases in the cash book and debit the ledger
account
166
64
39
5
Record credit sales in the sales day book
167
51
6
Post the sundry sales to ledger
154
7
Record goods purchased on credit in the purchases day book
8
-
4.37
0.85
-
45
69
69
86
2.27
1.08
3.93
1.96
-
4.43
0.73
-
31
118
56
64
2.43
0.98
6.81
1.96
Sig
-
-
4.47
0.74
-
17
103
130
19
2.44
0.72
2.44
1.96
Sig
51
-
-
4.43
0.79
-
117
67
77
8
3.09
0.91
3.60
1.96
Sig
63
52
-
-
4.37
0.79
-
40
113
64
52
2.52
0.96
4.35
1.96
Sig
180
51
38
-
-
4.52
0.73
-
127
83
59
-
3.85
0.79
1.39
1.96
Not Sig
Post the sundry purchases in the ledger account
141
64
64
-
-
4.29
0.83
-
-
35
180
54
1.93
0.57
2.47
1.96
Sig
9
Use return inwards book to record goods returned by customers
167
64
38
-
-
4.48
0.73
-
59
83
52
75
2.47
1.12
4.69
1.96
Sig
10
Enter transactions to subsidiary book from source documents
167
89
13
-
-
4.57
0.59
-
-
113
67
89
2.98
0.86
2.04
1.96
Sig
11
Post items to ledger applying double entry principle
154
64
51
-
-
4.38
0.79
-
112
114
43
-
3.76
0.72
0.98
1.96
Not Sig
12
Maintain store ledger account
142
75
52
-
-
4.33
0.78
-
23
108
78
60
2.34
0.92
4.92
1.96
Sig
13
Use bin card to record stock movement
139
52
78
-
-
4.23
0.87
-
24
113
62
70
2.33
0.96
3.87
1.96
Sig
14
Record goods sent back to suppliers in the return outward book
152
91
26
-
-
4.47
0.67
-
23
130
76
40
2.51
0.85
2.83
1.96
Sig
15
Post transactions to various accounting books as they occur.
178
78
13
-
-
4.61
0.58
-
76
141
37
15
3.03
0.80
5.18
1.96
Sig
4
109
The data presented in table 1 revealed that the mean ratings of the
respondents on the record-keeping skills perceived as important by small scale
operators were from 4.29 – 4.61 which showed that all the fifteen identified items
are important record-keeping skills needed by small business operators. On the
other hand, the mean ratings on the expressed possession of record-keeping skills
by the small business operators were from1.93 to 3.85 which is lower than the
corresponding levels of importance of the fifteen record-keeping skill items.
The table further showed that the result of correlated t-test on the importance
of the fifteen record-keeping skills and the level at which they are possessed
showed that the correlated-t (Cor-t) values of 13 out of the 15 identified items were
from 2.04 – 6.81 which are greater than the t-table (t-tab) value of 1.96. This
indicated that the level at which the small business operators possess the 13 items
on record-keeping skills are significantly lower than the level at which the skills
are rated important. The correlated-t values on the remaining 2 items, specifically
items 7 and 11 were 1.39 and 0.98 respectively are lesser than the t-table value of
1.96. This indicated that the level at which these two skills are possessed by the
small business operators are not significantly different from the level at which the
skills are rated important for managing small business in Anambra State.
Research Question 2
What are the perceived level of importance and expressed possession of
inventory control skills by small business operators?
The data for answering research question two is presented in table 2 below.
110
Table 2
Correlated t-test of the Mean Ratings of Respondents on Perceived Importance and Expressed Possession of Inventory Control skills.
Perceived Importance
S/N
1
Skill Statement
VHI
Expressed Posssession
HI
AI
LI
NI
X1
SD1
VHP
HP
AP
LP
NP
X2
SD2
Cor-t
t-tab
Decision
Sig
Calculate the minimum stock level to avoid stock outs
166
51
52
-
-
4.42
0.80
-
31
162
31
45
2.67
0.89
4.17
1.96
Calculate the maximum stock level to determine economic order
quantity
155
63
51
-
-
4.39
0.79
-
14
134
60
61
2.38
0.89
2.74
1.96
Calculate the reorder level of stock to determine the maximum usage
of stock and the lead time
142
76
49
12
-
4.29
0.87
-
9
70
89
101
1.95
0.87
3.97
1.96
4
Calculate the lead time to determine the period of reordering of stock
193
38
38
-
-
4.58
0.73
-
63
119
70
17
2.85
0.85
5.30
1.96
Sig
5
Use carrying cost and ordering cost to calculate the total cost of stock
155
88
26
-
-
4.48
0.67
-
34
101
65
69
2.37
1.00
2.73
1.96
Sig
6
Use period stock taking to determine the quantity of items in the store
140
77
52
-
-
4.33
0.78
-
57
78
42
92
2.37
1.16
2.94
1.96
Sig
7
Use continuous stock taking to determine the quantity of items in the
store
142
102
22
-
-
4.43
0.66
-
21
66
66
116
3.97
0.99
0.87
1.96
Use good storage facilities to store inventories to avoid inventory
damage resulting to loss of profit
116
90
63
-
-
4.19
0.79
-
24
91
140
14
2.46
0.73
1.36
1.96
9
Place order for moving inventory at the right quantity and quality
103
76
90
-
-
4.05
0.85
-
4
69
112
84
1.97
0.79
8.31
1.96
Sig
10
Keep buffer stock to avoid loss of customers
156
101
12
-
-
4.53
0.58
-
31
78
123
37
2.38
0.86
6.90
1.96
Sig
11
Record the insurance and usage of inventory
142
75
52
-
-
4.33
0.78
-
29
50
66
124
1.94
1.04
3.20
1.96
Sig
12
Calculate carrying cost to minimize loss
193
25
51
-
-
4.52
0.79
-
40
113
64
52
3.52
0.97
1.25
1.96
Not Sig
13
Set inventory prices as low as possible to attract customers
129
140
-
-
-
4.48
0.50
-
14
92
163
-
2.45
0.59
4.94
1.96
Sig
14
Take physical count of inventory to manage deterioration&
obsolescence
142
127
-
-
-
4.52
0.50
-
-
31
184
54
1.91
0.56
2.58
1.96
15
Store moving inventory to minimize holding cost
127
116
26
-
-
4.38
0.66
-
-
157
88
24
2.49
0.66
3.28
1.96
Sig
16
Frequent check of stock to prevent and control fraud.
101
142
26
-
-
4.28
0.63
-
-
167
71
31
2.51
0.69
3.04
1.96
Sig
2
3
8
Sig
Sig
Not Sig
Sig
Sig
111
The data presented in table 2 showed that the mean ratings of the
respondents on the inventory control skills perceived as important were from 4.05
– 4.58 which showed that all the sixteen (16) identified items are important
inventory control skills needed by small business operators. On the other hand, the
mean ratings on the expressed possession of inventory control skills possessed by
the respondents were from 1.91 to 3.97 which is lower than the corresponding
levels of importance of the sixteen inventory control skill items listed.
The table further showed that the result of correlated t-test on the importance
of the sixteen inventory control skills and the levels of expressed possession
showed that the correlated-t (Cor-t) values of 14 out of the 16 identified items were
from 2.58 – 8.31 which are greater than the t-table (t-tab) value of 1.96. This
indicated that the level at which the small business operators possess the 14 items
on inventory control skills are significantly lower than the level at which the skills
are perceived as important for operating small businesses. The correlated-t values
on the remaining 2 items, specifically items 7 and 12 were 0.87 and 1.25
respectively which are lesser than the t-table value of 1.96. This indicated that the
level at which these three skills are possessed by the small business operators are
not significantly different from the level at which the skills are rated important for
operating small business in Anambra State.
Research Question 3
What are the perceived important and expressed possessions of inventory
valuation skills by small business operators?
The data for answering research question three is presented in table 3 below.
112
Table 3
Correlated t-test of the Mean Ratings of Respondents on Perceived Importance and Expressed Possession of Inventory Valuation skills.
Perceived Importance
S/N
Skill Statement
VHI
HI
AI
155
63
51
Use first-in-first-out to calculate the value of items in the store
2
Expressed Possession
LI
NI
-
-
X1
SD1
4.39
0.79
VHP
HP
AP
LP
NP
-
-
64
122
83
X2
SD2
Cor-t
1.93
0.74
4.34
t-tab
1.96
Decision
Sig
153
52
64
-
-
4.33
0.84
-
29
50
66
124
1.94
1.04
2.40
1.96
Sig
153
104
12
-
-
4.48
0.72
-
40
113
64
52
2.52
0.97
6.58
1.96
Sig
Use last-in-first-out to calculate the value of items in the store
3
Use base stock method to calculate the value of stock
4
Use standard price to determine the value of closing inventory
192
64
13
-
-
4.67
0.57
-
-
143
95
31
2.42
0.69
4.35
1.96
Sig
5
Calculate the value of inventory using weighted average method
167
39
63
-
-
4.38
0.84
-
14
176
79
-
2.76
0.54
6.75
1.96
Sig
6
Calculate the value of stock using net realizable value
180
51
38
-
-
4.53
0.73
-
86
136
47
-
3.75
0.69
1.58
1.96
Not Sig
7
Calculate the value of stock using cost-plus method
127
52
90
-
-
4.14
0.89
-
51
127
74
17
2.79
0.82
4.28
1.96
Sig
8
Value inventory at lower of cost
166
39
64
-
-
4.38
0.84
-
29
50
66
124
1.94
1.04
2.88
1.96
Sig
9
Use inflated price of stock to value inventory by including all
155
89
25
-
-
4.08
0.66
-
54
82
109
24
3.62
0.91
1.31
1.96
Not Sig
142
64
63
-
-
4.29
0.82
-
56
146
48
19
2.89
0.81
3.93
1.96
Sig
costs incurred till sold
10
Value stocks at the expected price for the next purchase
11
Use market price method to assign values to inventories
154
90
25
-
-
4.18
0.66
-
24
132
62
51
2.47
0.65
5.37
1.96
Sig
12
Value inventory at the oldest prices
166
77
26
-
-
4.52
0.67
-
23
130
76
40
2.50
0.85
3.61
1.96
Sig
13
Value inventory based on more recently acquired stock prices.
40
51
-
-
4.01
0.79
-
90
144
31
4
3.78
0.79
1.00
1.96
Not Sig
178
113
The data presented in table 3 revealed that the mean ratings of the
respondents on the inventory valuation skills perceived as important were from
4.01 – 4.67 which showed that all the thirteen identified items are important
inventory valuation skills needed by small business operators. On the other hand,
the mean ratings on the inventory valuation skills possessed by the small business
operators were from 1.93 to 3.78 which are lower than the corresponding levels of
the perceived importance.
The table further showed that the result of correlated t-test on the importance
of the thirteen inventory valuation skill items and the expressed level of possession
showed that the correlated-t (Cor-t) values of 10 out of the 13 identified items were
from 2.40 – 6.75 which are greater than the t-table (t-tab) value of 1.96. This
implied that the level at which the small business operators possess the 10 items on
inventory valuation skills are significantly lower than the level at which the skills
are rated. The correlated-t values on the remaining 3 items, specifically items 6, 9
and 13 were 1.58, 1.31 and 1.00 respectively were less than the t-table value of
1.96. This indicated that the level at which these three skills are possessed by the
small business operators are not significantly different from the level at which the
skills are rated important for managing small business in Anambra State.
Research Question 4
What are the perceived level of importance and expressed possessions of
price determination skills by small business operators?
The data for answering research question four are presented in table 4 below.
114
Table 4
Correlated t-test of the Mean Ratings of Respondents on Perceived Importance and Expressed Possession of Price Determination skills.
Perceived Importance
S/N
Skill Statement
Expressed Possession
VHI
HI
AI
LI
NI
X1
SD1
VHP
HP
AP
LP
NP
X2
SD2
Cor-t
ttab
Decision
1
Calculate cost per unit of item
121
120
28
-
-
4.35
0.66
-
24
132
62
51
2.48
0.90
2.42
1.96
Sig
2
Calculate the total cost of product or service
126
11
32
-
-
4.34
0.68
-
23
130
76
40
2.50
0.85
2.75
1.96
Sig
3
Compute prime cost by adding direct costs
121
106
24
18
-
4.23
0.87
-
90
144
31
4
3.79
0.68
1.32
1.96
Not Sig
4
Calculate overheads by subtracting the sum of
factory,
administrative, selling and distribution expenses for total cost
115
132
22
-
-
4.35
0.63
-
-
137
92
40
2.36
0.73
3.92
1.96
5
Add direct wages to determine prime cost
127
142
-
-
4.04
0.50
-
51
127
74
17
2.89
0.82
3.81
1.96
6
Calculate profit or loss by subtracting the cost of sales from total
sales
128
103
38
-
-
4.33
0.71
-
23
130
76
40
2.51
0.85
2.07
1.96
Identify and allocate direct cost by adding direct and indirect
materials, wages and indirect expenses
140
129
-
-
-
4.52
0.50
-
54
82
109
24
2.61
0.91
3.18
1.96
Aggregate direct material cost, direct wages and direct expenses
to arrive at prime cost
-
31
82
60
96
2.18
1.05
2.44
1.96
Sig
114
117
38
-
-
4.28
0.69
Aggregate indirect material cost, indirect-wages and indirect
expenses to arrive at overhead cost
-
137
58
28
46
3.96
1.14
1.57
1.96
Not Sig
127
142
-
-
-
4.17
0.50
10
Calculate the selling price using mark-up system
140
129
-
-
-
4.52
0.50
-
35
71
77
86
2.20
1.03
3.10
1.96
Sig
11
Calculate the selling price by deducting the discount allowed to
-
31
110
68
60
2.42
0.96
6.63
1.96
Sig
arrive at agreed invoice price
180
77
12
-
-
4.62
0.57
Subtract selling expenses from gross profit to arrive at net profit.
179
64
26
-
-
4.57
0.66
-
15
106
131
17
2.44
0.70
2.42
1.96
Sig
7
8
9
12
Sig
Sig
Sig
Sig
The data presented in table 4 showed that the mean ratings of the
respondents on the price determination skills perceived as important by small scale
operators were from 4.04 – 4.62 which showed that all the twelve identified items
are important price determination skills needed by small business operators. On the
other hand, the mean ratings on the price determination skills possessed by the
small business operators were from 2.18 - 3.96 which are lower than the
corresponding levels of importance of the twelve price determination skill items.
The table further showed the result of correlated t-test on the perceived
importance of the twelve price determination skills and the level at which they
were possessed. The result revealed that 10 out of the 12 identified items were
from
2.07 – 6.63 which are greater than the t-table (t-tab) value of 1.96. This
implied that the level at which the small business operators possess the 10 items on
price determination skills are significantly lower than the level at which the skills
are rated important for operating small businesses. The correlated-t values on the
remaining 2 items, specifically items 3 and 9 were 1.32 and 1.57 respectively
which are less than the t-table value of 1.96. This indicated that the level at which
these two skills are possessed by the small business operators are not significantly
different from the level at which the skills are rated important for operating small
business.
Testing of Hypotheses
Hypothesis One
Age is not a significant source of difference in recording keeping skills
possessed by small business operators.
The data for testing hypothesis one is presented in table 5 below.
Table 5
Analysis of Variance (ANOVA) of the Mean Ratings of the Responses of the Respondents on Record-Keeping Skills
Possessed according to Age
S/N
1
2
Items
Source of
Variation
Sum of
Squares
DF
Mean
Square
Use double entry to record transactions
B/W Groups
6.30
2
3.15
W/N Groups
361.63
266
1.36
B/W Groups
0.89
2
0.44
314.29
266
1.18
4.46
2
2.23
251.51
266
0.94
Record all cash transactions in the cash book
W/N Groups
3
4
5
Debit cash sales in the cash book and post entry to credit
side of the ledger
Credit cash purchases in the cash book and debit the
ledger account
Record credit sales in the sales day book
B/W Groups
W/N Groups
B/W Groups
W/N Groups
B/W Groups
W/N Groups
6
Post the sundry sales to ledger
B/W Groups
0.58
2
0.29
137.65
266
0.51
2.35
2
1.17
221.50
266
0.83
4.15
2
2.07
246.93
266
0.92
0.35
2
0.18
168.45
266
0.63
F-Ratio F-Crit Decision
Post Hoc
Test
(Scheffe)
2.32
3.00
NS
-
0.37
3.00
NS
-
2.35
3.00
NS
-
0.56
3.00
NS
-
1.41
3.00
NS
-
2.23
3.00
NS
-
0.28
3.00
NS
-
1.80
3.00
NS
-
2.72
3.00
NS
-
0.44
3.00
NS
-
1.08
3.00
NS
3.00
NS
0.68
3.00
NS
-
0.36
3.00
NS
-
W/N Groups
7
8
9
10
Record goods purchased on credit in the purchases day
book
Post the sundry purchases in the ledger account
Use return inwards book to record goods returned by
customers
Enter transactions to subsidiary book from source
documents
B/W Groups
W/N Groups
B/W Groups
1.17
2
0.58
W/N Groups
86.48
266
0.32
B/W Groups
6.71
2
3.35
328.26
266
1.23
B/W Groups
0.66
2
0.33
W/N Groups
199.19
266
0.74
B/W Groups
1.10
2
0.55
266
0.51
4.93
2
2.46
W/N Groups
222.21
266
0.83
B/W Groups
1.26
2
0.63
W/N Groups
246.94
266
0.92
B/W Groups
0.53
2
0.26
W/N Groups
192.70
266
0.72
W/N Groups
11
Post items to ledger applying double entry principle
W/N Groups
12
13
14
Maintain store ledger account
Use bin card to record stock movement
Record goods sent back to suppliers in the return outward
book
B/W Groups
136.19
2.95
-
15
Post transactions to various accounting books as they
occur.
B/W Groups
0.01
2
0.00
W/N Groups
172.68
266
0.64
0.01
3.00
NS
The analysis of variance (ANOVA) presented in Table 5 above revealed that
the F-ratio values of all the 15 items were from 0.01 - 2.95 which are all less than
the F-critical value of 3.00 at 0.05 level of significance. This implied that, there
are no significant differences in the mean ratings of the responses of the small
business operators with 18 – 30 years, 31 – 40 years and above 41 years of age on
record- keeping skills possessed by the operators. Therefore, the null hypothesis of
no significant difference is accepted.
Hypothesis Two
Age is not a significant source of difference in inventory control skills
possessed by small business operators.
The data for testing hypothesis two is presented in table 6 below.
-
Table 6
Analysis of Variance (ANOVA) of the Mean Ratings of the Small Business Operators on
Inventory Control Skills Possessed according to Age
Source of
Variation
B/W Groups
W/N Groups
Sum of
Squares
3.80
DF
2
208.08
266
0.78
Calculate the maximum stock level to
determine economic order quantity
B/W Groups
W/N Groups
0.81
2
0.40
212.25
266
0.79
Calculate the reorder level of stock to
determine the maximum usage of
stock and the lead time
Calculate the lead time to determine
the period of reordering of stock
B/W Groups
W/N Groups
0.48
2
0.24
205.88
266
0.77
0.31
2
0.15
194.43
266
0.73
Use carrying cost and ordering cost to
calculate the total cost of stock
B/W Groups
W/N Groups
1.28
2
0.64
267.54
266
1.00
Use period stock taking to determine
the quantity of items in the store
B/W Groups
W/N Groups
0.76
2
0.38
360.06
266
1.35
Use continuous stock taking to
determine the quantity of items in the
store
Use good storage facilities to store
inventories to avoid inventory damage
resulting to loss of profit
B/W Groups
W/N Groups
2.54
2
1.27
263.22
266
0.99
3.50
2
1.75
139.41
266
0.52
Place order for moving inventory at
the right quantity and quality
B/W Groups
W/N Groups
1.85
2
0.92
166.96
266
0.62
10 Keep buffer stock to avoid loss of
customers
B/W Groups
W/N Groups
0.75
2
0.38
198.80
266
0.74
11 Record the insurance and usage of
inventory
B/W Groups
W/N Groups
3.23
2
1.61
285.81
266
1.07
12 Calculate carrying cost to minimize
loss
B/W Groups
W/N Groups
4.15
2
2.07
246.93
266
0.92
13 Set inventory prices as low as possible
to attract customers
B/W Groups
W/N Groups
0.27
2
0.13
94.19
266
0.35
14 Take physical count of inventory to
manage deterioration& obsolescence
B/W Groups
W/N Groups
4.41
2
1.70
81.62
266
0.90
15 Store moving inventory to minimize
holding cost
B/W Groups
W/N Groups
0.56
2
0.28
114.67
266
0.43
16 Frequent check of stock to prevent
and control fraud.
B/W Groups
W/N Groups
0.13
129.11
2
266
0.06
0.48
S/N Items
1 Calculate the minimum stock level to
avoid stock outs
2
3
4
5
6
7
8
9
B/W Groups
W/N Groups
B/W Groups
W/N Groups
Mean
FSquare Ratio F-Crit Decision
1.90
2.43 3.00
NS
Post Hoc
Test
(Scheffe)
-
0.51
3.00
NS
-
0.31
3.00
NS
-
0.21
3.00
NS
-
0.63
3.00
NS
-
0.28
3.00
NS
-
1.28
3.00
NS
-
3.33
3.00
S*
Above 40yrs
1.47
3.00
NS
-
0.50
3.00
NS
-
1.50
3.00
NS
-
2.23
3.00
NS
-
0.38
3.00
NS
-
3.29
3.00
S*
Above 40yrs
0.65
3.00
NS
-
0.13
3.00
NS
-
The analysis of variance (ANOVA) presented in Table 6 above showed that
the F-ratio values of 14 out of 16 items were from 0.13 - 2.23 which are less than
the F-critical value of 3.00 at 0.05 level of significance. This implied that, there
are no significant differences in the mean ratings of the responses of the small
business operators with 18 – 30 years, 31 – 40 years and above 41 years of age on
the 14 record keeping skills possessed by the operators. Therefore, the null
hypothesis of no significant difference is accepted.
On the other hand, the F-ratio values of the remaining two items, specifically
items 8 and 14 are 3.33 and 3.29 respectively. These are greater than the F-critical
value of 3.00 at 0.05 level of significance. They indicated that there is a significant
difference in the mean ratings of the small business operators with 18 – 30 years,
31 – 40 years and above 41 years of age on the record keeping skills possessed by
the operators. Therefore, the null hypothesis of no significant difference was
rejected.
The result of the Post Hoc test for items 8 and 14 that are significant
revealed that the source of difference are small business operators with above 40
years of age. This implied that business operators of above 40 years of age
possessed the two inventory control skills better than others with 18 – 30 years and
31 - 40 years.
Hypothesis Three
Age is not a significant source of difference in inventory valuation skills
possessed by small business operators.
The data for testing hypothesis three is presented in table 7 below.
Table 7
Analysis of Variance (ANOVA) of the Mean Ratings of the Respondents on Inventory
Valuation Skills Possessed according to Age
S/N Items
1
2
3
4
5
6
7
8
Use first-in-first-out to calculate the value
of items in the store
Use last-in-first-out to calculate the value of
items in the store
Use base stock method to calculate the
value of stock
Use standard price to determine the value
of closing inventory
Calculate the value of inventory using
weighted average method
Sum of
Squares
DF
B/W Groups
W/N Groups
2.01
2
1.00
143.64
266
0.54
3.23
2
1.61
285.81
266
1.07
4.15
2
2.07
246.93
266
0.92
0.12
2
0.06
127.24
266
0.47
0.22
2
0.11
77.07
266
0.29
0.95
2
0.47
126.39
266
0.47
0.95
2
0.47
179.96
266
0.67
3.23
2
1.61
285.81
266
1.07
1.16
2
0.58
218.39
266
0.82
0.81
2
0.40
175.84
266
0.66
B/W Groups
W/N Groups
B/W Groups
W/N Groups
B/W Groups
W/N Groups
B/W Groups
W/N Groups
Calculate the value of stock using net
realizable value
B/W Groups
W/N Groups
Calculate the value of stock using cost-plus
method
B/W Groups
W/N Groups
Value inventory at lower of cost
B/W Groups
W/N Groups
Use inflated price of stock to value
inventory by including all costs incurred till
sold
B/W Groups
W/N Groups
10 Value stocks at the expected price for the
B/W Groups
W/N Groups
9
next purchase
11 Use market price method to assign values
to inventories
12 Value inventory at the oldest prices
Post Hoc
Mean
Test
Square F-Ratio F-Crit Decision (Scheffe)
Source of
Variance
B/W Groups
W/N Groups
0.56
2
0.28
216.57
266
0.81
B/W Groups
0.53
2
0.26
1.86
3.00
NS
-
1.50
3.00
NS
-
2.23
3.00
NS
-
0.13
3.00
NS
-
0.38
3.00
NS
-
1.00
3.00
NS
-
0.70
3.00
NS
-
1.50
3.00
NS
-
0.71
3.00
NS
-
0.61
3.00
NS
-
0.34
3.00
NS
-
0.36
3.00
NS
-
13 Value inventory based on more recently
acquired stock prices.
W/N Groups
192.70
266
0.72
B/W Groups
W/N Groups
0.45
2
0.22
126.87
266
0.47
0.47
3.00
NS
The analysis of variance (ANOVA) presented in Table 7 above showed that
the F-ratio values of all the 13 items were from 0.13 - 2.23 which are all less than
the F-critical value of 3.00 at 0.05 level of significance. This indicated that, there
are no significant differences in the mean ratings of the respondents with 18 – 30
years,
31 – 40 years and above 41 years of age on the inventory valuation skills
possessed by the operators. Therefore, the null hypothesis of no significant
difference was accepted.
Hypothesis Four
Age is not a significant source of difference in price determination skills
possessed by small business operators.
The data for testing hypothesis four are presented in table 8 below.
-
Table 8
Analysis of Variance (ANOVA) of the Mean Ratings of the Respondentss on Price
Determination Skills Possessed according to Age
S/N
Items
Source of
Variance
Sum of
Squares
DF
Mean
Square F-Ratio F-Crit Decision
Post Hoc
Test
(Scheffe)
1
Calculate cost per unit of item
B/W Groups
W/N Groups
0.56
216.57
2
266
0.28
0.81
0.34
3.00
NS
-
2
Calculate the total cost of product or
service
B/W Groups
W/N Groups
0.53
192.70
2
266
0.26
0.72
0.36
3.00
NS
-
3
Compute prime cost by adding direct
costs
B/W Groups
W/N Groups
0.45
126.87
2
266
0.22
0.47
0.47
3.00
NS
-
4
Calculate overheads by subtracting
the sum of factory, administrative,
selling and distribution expenses
B/W Groups
W/N Groups
1.04
140.97
2
266
0.52
0.53
0.98
3.00
NS
-
5
Add direct wages to determine prime
cost
B/W Groups
W/N Groups
0.95
179.96
2
266
0.47
0.67
0.70
3.00
NS
-
6
Calculate profit or loss by subtracting
the cost of sales from total sales
B/W Groups
W/N Groups
0.53
192.70
2
266
0.26
0.72
0.36
3.00
NS
-
7
Identify and allocate direct cost by
adding direct and indirect materials,
wages and indirect expenses
B/W Groups
W/N Groups
1.16
218.39
2
266
0.58
0.82
0.71
3.00
NS
-
8
Aggregate direct material cost, direct
wages and direct expenses to arrive at
prime cost
B/W Groups
W/N Groups
3.27
290.15
2
266
1.63
1.09
1.50
3.00
NS
-
9
Aggregate indirect material cost,
indirect-wages and indirect expenses
to arrive at overhead cost
B/W Groups
W/N Groups
5.12
342.80
2
266
2.56
1.28
1.98
3.00
NS
-
10
Calculate the selling price using
mark-up system
B/W Groups
W/N Groups
5.11
280.64
2
266
2.55
1.05
2.42
3.00
NS
-
11
Calculate the selling price by
deducting the discount allowed to
arrive at agreed invoice price
B/W Groups
W/N Groups
12.33
235.03
2
266
6.16
0.88
6.98
3.00
S*
Above 40yrs
12
Subtract selling expenses from gross
profit to arrive at net profit.
B/W Groups
W/N Groups
2.19
128.16
2
266
1.09
0.48
2.27
3.00
NS
-
The analysis of variance (ANOVA) presented in Table 8 above showed that
the F-ratio values of 11 out of 12 items were from 0.34 - 2.42 which are less than
the F-critical value of 3.00 at 0.05 level of significance. This implied that, there
are no significant differences in the mean ratings of the responses of the small
business operators with 18 – 30 years, 31 – 40 years and above 41 years of age on
the level at which the 11 price determination skills are being possessed by the
operators. Therefore, the null hypothesis of no significant difference was accepted.
On the other hand, the F-ratio value of the remaining one item, specifically
item 11 is 6.98 which is greater than the F-critical value of 3.00 at 0.05 level of
significance. This indicated that there is significant difference in the mean response
of small business operators with 18 – 30 years, 31 – 40 years and above 41 years of
age on the level at which that particular price determination skill is possessed by
the business operators. Therefore, the null hypothesis of no significant difference
for item 11 was rejected.
The result of the Post Hoc test for item 11 that was significant revealed that
the source of difference are small business operators with above 40 years of age.
This implied that business operators of above 40 years of age possessed the price
determination skill better than others with 18 – 30 years and 31 - 40 years.
Hypothesis Five
Experience is not a significant source of difference in recording keeping
skills possessed by small business operators.
The data for testing hypothesis five are presented in table 9 below.
Table 9
Analysis of Variance (ANOVA) of the Mean Ratings of the Respondents on RecordKeeping Skills Possessed according to Years of Experience
S/N
1 Use
Items
double
transactions
entry
to
record
Post Hoc
Mean
FTest
Square Ratio F-Crit Decision (Scheffe)
2.27
3.66 3.00
Above 10yrs
S*
1.36
0.50
4.43 3.00
Above 10yrs
S*
1.18
Source of
Variance
B/W Groups
W/N Groups
B/W Groups
W/N Groups
Sum of
Squares
4.54
363.40
1.01
314.17
DF
2
266
2
266
B/W Groups
W/N Groups
B/W Groups
W/N Groups
5.64
251.32
4.26
135.96
2
266
2
266
2.32
0.94
1.13
0.51
3.46
3.00
S*
Above 10yrs
3.21
3.00
S*
6 - 10yrs
2
Record all cash transactions in the
cash book
3
Debit cash sales in the cash book and
post entry to credit side of the ledger
4
Credit cash purchases in the cash book
and debit the ledger account
5
Record credit sales in the sales day
book
B/W Groups
W/N Groups
1.09
222.76
2
266
0.54
0.83
0.65
3.00
NS
-
6
Post the sundry sales to ledger
2
266
2
266
12.95
0.84
1.66
0.62
3.00
S*
Above 10yrs
Record goods purchased on credit in
the purchases day book
25.91
225.18
3.32
165.48
15.30
7
B/W Groups
W/N Groups
B/W Groups
W/N Groups
2.67
3.00
NS
-
8
Post the sundry purchases in the ledger
account
2
266
2
266
3.75
0.30
0.53
1.25
3.00
S*
6 - 10yrs
Use return inwards book to record
goods returned by customers
7.51
80.14
1.07
333.90
12.46
9
B/W Groups
W/N Groups
B/W Groups
W/N Groups
0.42
3.00
NS
-
B/W Groups
W/N Groups
B/W Groups
W/N Groups
12.47
187.38
1.69
135.61
2
266
2
266
6.23
0.70
0.84
0.51
8.85
3.00
S*
Above 10yrs
1.65
3.00
NS
-
B/W Groups
W/N Groups
18.59
208.56
2
266
9.29
0.78
11.85
3.00
S*
Above 10yrs
B/W Groups
19.33
2
9.66
11.26
3.00
S*
Above 10yrs
W/N Groups
228.88
266
0.86
B/W Groups
0.98
2
0.49
0.67
3.00
NS
-
W/N Groups
192.26
266
0.72
B/W Groups
1.41
2
0.70
7.09
3.00
S*
Above 10yrs
W/N Groups
171.28
266
0.64
10 Enter transactions to subsidiary book
from source documents
11 Post items to ledger applying double
entry principle
12 Maintain store ledger account
13 Use
bin card
movement
to
record
stock
14 Record goods sent back to suppliers in
the return outward book
15 Post transactions to various accounting
books as they occur.
The analysis of variance (ANOVA) presented in Table 9 above showed that
the F-ratio values of 10 out of 15 items were from 3.21 - 15.30 which are all
greater than the F-critical value of 3.00 at 0.05 level of significance. This implied
that, there are significant differences in the mean ratings of the responses of the
small business operators with 1 - 5years, 6 – 10 years and above 10 years of
experience on the 10 record keeping skills possessed. Therefore, the null
hypothesis of no significant difference was rejected.
On the other hand, the F-ratio values of the remaining five items,
specifically items 5, 7, 9, 11 and 14 are 0.65, 2.67, 0.42, 1.65 and 0.67 respectively
which are less than the F-critical value of 3.00 at 0.05 level of significance,
indicating that there are no significant differences in the mean ratings of the of the
small business operators with 1 - 5years, 6 – 10 years and above 10 years of
experience on the five record-keeping skills possessed by the operators. Therefore,
the null hypothesis of no significant difference was accepted.
The result of the Post Hoc test for the 10 items that are significant revealed
that the source of difference for items 1, 2, 3, 6, 10, 12, 13 and 15 are small
business operators with above 10 years of business experience. This implied that
business operators of above 10 years of experience possessed record-keeping skill
items 1, 2, 3, 6, 10, 12, 13 and 15 better than others. The source of difference for
items 4 and 8 are small business operators with 6 – 10 years of business
experience. This means that business operators with 6 – 10 years of experience
possessed record-keeping skills for items 4 and 8 better than others.
Hypothesis Six
Experience is not a significant source of difference in Inventory control
skills possessed by small business operators.
The data for testing hypothesis six are presented in table 10 below.
Table 10
Analysis of Variance (ANOVA) of the Mean Ratings of the Respondents on Inventory
Control Skills Possessed according to Years of Experience
S/N
Items
1
Calculate the minimum stock level
to avoid stock outs
2
Calculate the maximum stock level
to determine economic order
quantity
Calculate reorder level of stock to
determine the maximum usage of
stock and the lead time
Calculate the lead time to determine
the period of reordering of stock
3
4
5
6
7
8
9
10
11
12
Source of
Variance
Sum of
Squares
DF
B/W Groups
W/N Groups
B/W Groups
W/N Groups
4.70
209.18
2.59
2
266
2
1.35
0.78
1.29
210.48
266
0.79
B/W Groups
W/N Groups
2.36
2
1.18
204.00
266
0.76
4.25
2
2.12
190.50
266
0.71
1.14
2
0.57
267.68
266
1.00
9.30
2
4.65
351.51
266
1.32
3.11
2
1.55
262.64
266
0.98
1.78
2
0.89
141.13
266
0.53
19.64
2
9.82
149.16
266
0.56
34.58
2
17.29
164.98
266
0.62
2.21
2
1.10
286.83
266
1.07
25.91
2
12.95
225.18
266
0.84
B/W Groups
W/N Groups
Use carrying cost and ordering cost
to calculate the total cost of stock
B/W Groups
W/N Groups
Use period stock taking to
determine the quantity of items in
the store
Use continuous stock taking to
determine the quantity of items in
the store
Use good storage facilities to store
inventories to avoid inventory
damage resulting to loss or profit
Place order for moving inventory at
the right quantity and quality
B/W Groups
W/N Groups
Keep buffer stock to avoid loss of
customers
B/W Groups
W/N Groups
Record the insurance and usage of
inventory
B/W Groups
W/N Groups
Calculate carrying cost to minimize
loss
B/W Groups
W/N Groups
B/W Groups
W/N Groups
B/W Groups
W/N Groups
B/W Groups
W/N Groups
Mean
Square F-Ratio F-Crit Decision
Post Hoc
Test
(Scheffe)
5.71
3.00
S*
6 – 10 years
2.63
3.00
NS
-
1.54
3.00
NS
-
7.96
3.00
S*
Above 10yrs
0.56
3.00
NS
-
3.52
3.00
S*
Above 10yrs
1.57
3.00
NS
-
1.68
3.00
NS
-
17.51
3.00
S*
6 – 10 years
27.87
3.00
S*
Above 10yrs
5.02
3.00
S*
Above 10yrs
15.30
3.00
S*
Above 10yrs
13
14
15
16
Set inventory prices as low as
possible to attract customers
B/W Groups
W/N Groups
Take physical count of inventory to
manage
deterioration&
obsolescence
Store
moving
inventory
to
minimize holding cost
B/W Groups
W/N Groups
B/W Groups
W/N Groups
B/W Groups
W/N Groups
Frequent check of stock to prevent
and control fraud.
2.25
2
1.12
92.21
266
0.34
6.95
2
3.47
76.07
266
0.28
0.99
114.24
13.42
115.81
2
266
2
266
0.49
0.42
6.71
0.43
3.25
3.00
S*
Above 10yrs
12.16
3.00
S*
6 – 10 years
1.16
3.00
NS
-
15.42
3.00
S*
Above 10yrs
The analysis of variance (ANOVA) presented in Table 10 above showed that
the F-ratio values of 10 out of 16 items were from 3.25 - 27.87 which are all
greater than the F-critical value of 3.00 at 0.05 level of significance. This indicated
that, there are significant differences in the mean ratings of the responses of the
small business operators with 1 - 5years, 6 – 10 years and above 10 years of
experience on the 10 inventory control skills possessed by the operators. Therefore,
the null hypothesis of no significant difference was rejected.
On the other hand, the F-ratio values of the remaining six items, specifically
items 2, 3, 5, 7, 8, and 15 are 2.63, 1.54, 0.56, 1.57, 1.68 and 1.16 respectively
which are less than the F-critical value of 3.00 at 0.05 level of significance,
indicating that there are no significant differences in the mean ratings of the
responses of the small business operators with 1 - 5years, 6 – 10 years and above
10 years of experience on the six
inventory control skills possessed by the
operators. Therefore, the null hypothesis of no significant difference was accepted.
The result of the Post Hoc test for the 10 items that are significant revealed
that the source of difference for items 4, 6, 10, 11, 12, 13 and 16 are small business
operators with above 10 years of business experience. This implied that business
operators of above 10 years of experience possessed inventory control skill items
4, 6, 10, 11, 12, 13 and 16 better than others. The source of difference for items 1,
9 and 14 are small business operators with 6 – 10 years of business experience.
This means that business operators with 6 – 10 years of experience possessed the
inventory control skill items 1, 9 and 14 better than others.
Hypothesis Seven
Experience is not a significant source of difference in Inventory valuation
skills possessed by small business operators.
The data for testing hypothesis seven are presented in table 11 below.
Table 11
Analysis of Variance (ANOVA) of the Mean Ratings of the Respondents on
Inventory Valuation Skills Possessed according to Years of Experience
DF
1
Use first-in-first-out to calculate the
value of items in the store
B/W Groups
W/N Groups
3.24
142.41
2
266
1.62
0.53
3.02
3.00
S*
Above 10yrs
2
Use last-in-first-out to calculate the
value of items in the store
B/W Groups
W/N Groups
2.21
286.83
2
266
1.10
1.07
1.02
3.00
NS
-
3
Use base stock method to calculate
the value of stock
B/W Groups
W/N Groups
25.91
225.18
2
266
12.95
0.84
15.30
3.00
S*
Above 10yrs
4
Use standard price to determine the
value of closing inventory
B/W Groups
W/N Groups
0.39
126.97
2
266
0.19
0.47
0.41
3.00
NS
-
5
Calculate the value of inventory
using weighted average method
B/W Groups
W/N Groups
1.23
76.06
2
266
0.61
0.28
4.15
3.00
S*
6 – 10years
6
Calculate the value of stock using net
realizable value
B/W Groups
W/N Groups
1.45
125.88
2
266
0.73
0.47
1.54
3.00
NS
-
7
Calculate the value of stock using
cost-plus method
B/W Groups
W/N Groups
6.33
174.58
2
266
3.16
0.65
4.82
3.00
S*
Above 10yrs
8
Value inventory at lower of cost
B/W Groups
W/N Groups
2.21
286.83
2
266
1.10
1.07
1.02
3.00
NS
-
Items
Sum of
Squares
Post Hoc Test
(Scheffe)
Mean
Square
S/N
Source of
Variance
F-Ratio F-Crit Decision
9
Use inflated price of stock to value
inventory by including all costs
incurred till sold
B/W Groups
W/N Groups
40.71
178.84
2
266
20.35
0.67
30.28
3.00
S*
Above 10yrs
10
Value stocks at the expected price for
the next purchase
B/W Groups
W/N Groups
19.98
156.66
2
266
9.99
0.58
16.96
3.00
S*
Above 10yrs
11
Use market price method to assign
values to inventories
B/W Groups
W/N Groups
30.21
186.92
2
266
15.10
0.70
21.49
3.00
S*
Above 10yrs
12
Value inventory at the oldest prices
B/W Groups
W/N Groups
0.98
192.26
2
266
0.49
0.72
5.67
3.00
S*
Above 10yrs
13
Value inventory based on more
recently acquired stock prices.
B/W Groups
W/N Groups
1.80
125.52
2
266
0.90
0.47
3.91
3.00
S*
Above 10yrs
The analysis of variance (ANOVA) presented in Table 11 above revealed
that the F-ratio values of 9 out of 13 items were from 3.02 - 30.28 which are all
greater than the F-critical value of 3.00 at 0.05 level of significance. This indicated
that, there are significant differences in the mean ratings of the responses of the
small business operators with 1 - 5years, 6 – 10 years and above 10 years of
experience on the 9 inventory valuation skills possessed by the operators.
Therefore, the null hypothesis of no significant difference was rejected.
On the other hand, the F-ratio values of the remaining four items,
specifically items 2, 4, 6 and 8 are 1.02, 0.41, 1.54 and 1.02 and respectively which
are less than the F-critical value of 3.00 at 0.05 level of significance, indicating that
there are no significant differences in the mean ratings of the responses of the
small business operators with 1 - 5years, 6 – 10 years and above 10 years of
experience on the inventory valuation skills possessed by the operators. Therefore,
the null hypothesis of no significant difference was accepted.
The result of the Post Hoc test for the 9 items that are significant revealed
that the source of difference for items 1, 3, 7, 9, 10, 11, 12 and 13 are small
business operators with above 10 years of business experience. This implied that
business operators of above 10 years of experience possessed inventory valuation
skill items 1, 3, 7, 9, 10, 11, 12 and 13 better than others. The source of difference
for item 5 is small business operators with 6 – 10 years of business experience.
This means that business operators with 6 – 10 years of experience possessed the
inventory control skill for item 5 better than others.
Hypothesis Eight
Experience is not a significant source of difference in price determination
skills possessed by small business operators.
The data for testing hypothesis eight are presented in table 12 below.
Table 12
Analysis of Variance (ANOVA) of the Mean Ratings of the Respondents on Price
Determination Skills Possessed according to Years of Experience
S/N
Items
Source of
Variance
Sum of
Squares
DF
Mean
Square F-Ratio F-Crit Decision
Post Hoc
Test
(Scheffe)
1
Calculate cost per unit of item
B/W Groups
W/N Groups
6.21
186.92
2
266
5.10
1.70
11.49
3.00
S*
Above 10yrs
2
Calculate the total cost of product or
service
B/W Groups
W/N Groups
5.98
192.26
2
266
1.49
0.72
5.67
3.00
S*
6 – 10years
3
Compute prime cost by adding
direct costs
B/W Groups
W/N Groups
1.80
125.52
2
266
0.90
0.47
1.91
3.00
NS
-
4
Calculate overheads by subtracting
the sum of factory, administrative,
selling and distribution expenses for
total cost
Add direct wages to determine
prime cost
B/W Groups
W/N Groups
11.97
130.04
2
266
5.98
0.48
12.24
3.00
S*
Above 10yrs
B/W Groups
W/N Groups
6.33
174.58
2
266
3.16
0.65
4.82
3.00
S*
Above 10yrs
5
6
Calculate profit or loss by
subtracting the cost of sales from
total sales
B/W Groups
W/N Groups
0.98
192.26
2
266
0.49
0.72
1.67
3.00
NS
-
7
Identify and allocate direct cost by
adding direct and indirect materials,
wages and indirect expenses
B/W Groups
W/N Groups
7.71
178.84
2
266
5.35
0.67
13.23
3.00
S*
Above 10yrs
8
Aggregate direct material cost,
direct wages and direct expenses to
arrive at prime cost
B/W Groups
W/N Groups
4.85
288.58
2
266
2.42
1.08
2.23
3.00
NS
-
9
Aggregate indirect material cost,
indirect-wages
and
indirect
expenses to arrive at overhead cost
B/W Groups
W/N Groups
4.94
342.98
2
266
2.47
1.28
3.91
3.00
S*
6 – 10years
10
Calculate the selling price using
mark-up system
B/W Groups
W/N Groups
17.04
268.71
2
266
8.52
1.01
8.43
3.00
S*
Above 10yrs
11
Calculate the selling price by
deducting the discount allowed to
arrive at agreed invoice price
B/W Groups
W/N Groups
12.25
235.11
2
266
6.12
0.88
6.93
3.00
S*
Above 10yrs
12
Subtract selling expenses from gross
profit to arrive at net profit.
B/W Groups
W/N Groups
4.22
126.12
2
266
2.11
0.47
4.45
3.00
S*
Above 10yrs
The analysis of variance (ANOVA) presented in Table 12 above showed that
the F-ratio values of 9 out of 12 items were from 3.91 - 13.23 which are all greater
than the F-critical value of 3.00 at P 0.05 level of significance. This implied that,
there are significant differences in the mean ratings of the responses of the small
business operators with 1 - 5years, 6 – 10 years and above 10 years of experience
on the 9 price determination skills possessed by the operators. Therefore, the null
hypothesis of no significant difference was rejected.
On the other hand, the F-ratio values of the remaining three items,
specifically items 3, 6 and 8 are 1.91, 2.67 and 2.23 respectively which are less
than the F-critical value of 3.00 at 0.05 level of significance, indicating that there
are no significant differences in the mean ratings of the responses of the small
business operators with 1 - 5years, 6 – 10 years and above 10 years of experience
on the three price determination skills possessed by the operators. Therefore, the
null hypothesis of no significant difference was accepted.
The result of the Post Hoc test for the 9 items that are significant showed
that the source of difference for items 1, 4, 5, 7, 10, 11 and 12 are small business
operators with above 10 years of business experience. This implied that business
operators of above 10 years of experience possessed price determination skill items
1, 4, 5, 7, 10, 11 and 12 better than others. The source of difference for items 2 and
9 are small business operators with 6 – 10 years of business experience. This
means that business operators with 6 – 10 years of experience possessed the price
determination skill items 2 and 9 better than others.
Hypothesis Nine
Qualification is not a significant source of difference in recording keeping
skills possessed by small business operators.
The data for testing hypothesis nine are presented in table 13 below.
Table 13
Analysis of Variance (ANOVA) of the Mean Ratings of the Responses of Small Business
Operators on Record-Keeping Skills Possessed according to Qualification
S/N Items
1
2
3
4
Use double entry to record transactions
Source of
Variance
Sum of
Squares
DF
Mean
Square
B/W Groups
5.35
2
1.67
W/N Groups
362.59
266
1.37
Record all cash transactions in the cash
book
B/W Groups
4.25
2
2.12
W/N Groups
310.93
266
1.16
Debit cash sales in the cash book and post
entry to credit side of the ledger
B/W Groups
8.11
2
1.55
W/N Groups
247.86
266
0.95
B/W Groups
0.20
2
0.10
W/N Groups
138.03
266
0.51
Credit cash purchases in the cash book
and debit the ledger account
F-Ratio F-Crit Decision
Post Hoc
Test
(Scheffe)
5.22
3.00
S*
HND/B.Sc
3.82
3.00
S*
ND/NCE
7.63
3.00
S*
HND/B.Sc
0.19
3.00
NS
-
5
6
7
8
9
10
11
12
Record credit sales in the sales day book
Post the sundry sales to ledger
B/W Groups
7.94
2
1.47
W/N Groups
215.91
266
0.83
B/W Groups
4.01
2
1.00
W/N Groups
247.08
266
0.93
Record goods purchased on credit in the
purchases day book
B/W Groups
2.12
2
1.06
W/N Groups
166.68
266
0.62
Post the sundry purchases in the ledger
account
B/W Groups
6.825
2
1.41
W/N Groups
180.83
266
0.82
Use return inwards book to record goods
returned by customers
B/W Groups
.63
2
0.31
W/N Groups
334.34
266
1.25
Enter transactions to subsidiary book from
source documents
B/W Groups
8.03
2
2.01
W/N Groups
191.82
266
0.73
Post items to ledger applying double entry
principle
B/W Groups
4.75
2
0.37
W/N Groups
132.54
266
0.51
Maintain store ledger account
B/W Groups
6.06
2
2.53
221.09
266
0.85
W/N Groups
13
14
15
Use bin card to record stock movement
B/W Groups
4.15
2
1.07
W/N Groups
244.06
266
0.93
Record goods sent back to suppliers in the
return outward book
B/W Groups
0.57
2
0.28
W/N Groups
192.66
266
0.72
Post transactions to various accounting
books as they occur.
B/W Groups
5.06
2
1.53
W/N Groups
167.63
266
0.74
4.56
3.00
S*
HND/B.Sc
3.17
3.00
S*
HND/B.Sc
1.69
3.00
NS
-
4.26
3.00
S*
HND/B.Sc
0.25
3.00
NS
-
5.74
3.00
S*
HND/B.Sc
3.73
3.00
S*
HND/B.Sc
6.62
3.00
S*
HND/B.Sc
3.08
3.00
S*
ND/NCE
0.39
3.00
NS
-
3.82
3.00
S*
HND/B.Sc
The analysis of variance (ANOVA) presented in Table 13 above revealed
that the F-ratio values of 11 out of 15 items were from 3.08 – 7.63 which are all
greater than the F-critical value of 3.00 at 0.05 level of significance. This implied
that, there are significant differences in the mean ratings of the respondents with
SSCE/NECO, ND/NCE and HND/B.Sc qualification on the 11 record-keeping
skills possessed by the operators. Therefore, the null hypothesis of no significant
difference for the 11 items was rejected.
On the other hand, the F-ratio values of the remaining four items,
specifically items 4, 7, 9 and 14 are 0.19, 1.69, 0.25 and 0.39 respectively which
are less than the F-critical value of 3.00 at 0.05 level of significance, indicating that
there are no significant differences in the mean ratings of the responses of the
respondents with SSCE/NECO, ND/NCE and HND/B.Sc qualification on the four
record-keeping skills possessed by the operators. Therefore, the null hypothesis of
no significant difference for the four items was accepted.
The result of the Post Hoc test for the 11 items that are significant showed
that the source of difference for items 1, 3, 5, 6, 8, 10, 11, 12 and 15 are small
business operators with HND/B.Sc qualification. This implied that business
operators with HND/B.Sc qualification possessed record-keeping skill items 1, 3,
5, 6, 8, 10, 11, 12 and 15 better than others. The source of difference for items 2
and 13 are small business operators with ND/NCE qualification. This means that
business operators with ND/NCE qualification possessed the record-keeping skill
items 2 and 13 better than others.
Hypothesis Ten
Qualification is not a significant source of difference in inventory control
skills possessed by small business operators.
The data for testing hypothesis ten are presented in table 14 below.
Table 14
Analysis of Variance (ANOVA) of the Mean Ratings of the Respondents on Inventory
Control Skills Possessed according to Qualification
S/N
Items
1
Calculate the minimum stock level to
avoid stock outs
2
Calculate the maximum stock level to
determine economic order quantity
3
Calculate the reorder level of stock to
determine the maximum usage of stock
and the lead time
Calculate the lead time to determine the
period of reordering of stock
4
5
Use carrying cost and ordering cost to
calculate the total cost of stock
6
Use period stock taking to determine
the quantity of items in the store
7
Use continuous stock taking to
determine the quantity of items in the
store
Use good storage facilities to store
inventories to avoid inventory damage
resulting to loss of profit
Place order for moving inventory at the
right quantity and quality
8
9
10
Keep buffer stock to avoid loss of
customers
11
Record the insurance and usage of
inventory
12
Calculate carrying cost to minimize loss
13
Set inventory prices as low as possible
to attract customers
14
Take physical count of inventory to
manage deterioration& obsolescence
Source of
Variance
Sum of
Squares
DF
Mean
Square
B/W Groups
W/N Groups
B/W Groups
W/N Groups
B/W Groups
W/N Groups
8.22
207.66
7.47
205.60
0.54
2
266
2
266
2
0.61
0.79
1.23
0.79
0.27
205.82
266
0.77
B/W Groups
W/N Groups
B/W Groups
W/N Groups
B/W Groups
W/N Groups
B/W Groups
W/N Groups
14.63
180.11
2.92
265.89
7.09
353.72
14.99
2
266
2
266
2
266
2
1.31
0.73
1.46
1.00
2.04
1.34
1.99
250.76
266
0.99
B/W Groups
W/N Groups
5.49
2
1.04
137.42
266
0.53
B/W Groups
W/N Groups
B/W Groups
W/N Groups
B/W Groups
W/N Groups
B/W Groups
W/N Groups
B/W Groups
W/N Groups
B/W Groups
W/N Groups
8.68
160.13
0.61
198.95
3.45
285.59
15.01
236.08
5.34
189.12
5.96
177.06
2
266
2
266
2
266
2
266
2
266
2
266
1.14
0.63
0.30
0.74
1.72
1.07
1.006
0.93
1.27
0.95
0.98
0.60
F-Ratio F-Crit Decision
Post Hoc
Test
(Scheffe)
5.77
3.00
S*
HND/B.Sc
3.56
3.00
S*
ND/NCE
0.35
3.00
NS
-
8.43
3.00
S*
HND/B.Sc
1.46
3.00
NS
-
5.52
3.00
S*
HND/B.Sc
7.00
3.00
S*
HND/B.Sc
3.46
3.00
S*
ND/NCE
4.54
3.00
S*
HND/B.Sc
1.40
3.00
NS
-
2.60
3.00
NS
-
11.07
3.00
S*
HND/B.Sc
6.92
3.00
S*
HND/B.Sc
3.57
3.00
S*
ND/NCE
15
Store moving inventory to minimize
holding cost
16
Frequent check of stock to prevent and
control fraud.
B/W Groups
W/N Groups
B/W Groups
W/N Groups
0.48
114.76
3.30
125.94
2
266
2
266
0.24
0.43
1.65
0.47
0.55
3.00
NS
-
3.48
3.00
S*
HND/B.Sc
The analysis of variance (ANOVA) presented in Table 14 above revealed
that the F-ratio values of 11 out of 16 items were from 3.46 – 11.07 which are all
greater than the F-critical value of 3.00 at 0.05 level of significance. This indicated
that, there are significant differences in the mean ratings of the responses of the
small business operators with SSCE/NECO, ND/NCE and HND/B.Sc qualification
on the 11 inventory control skills possessed by the operators. Therefore, the null
hypothesis of no significant difference for the 11 items was rejected.
On the other hand, the F-ratio values of the remaining five items,
specifically items 3, 5, 10, 11 and 15 are 0.35, 1.46, 1.40, 2.60 and 0.55
respectively which are less than the F-critical value of 3.00 at 0.05 level of
significance, indicating that there are no significant differences in the mean ratings
of the respondents with SSCE/NECO, ND/NCE and HND/B.Sc qualification on
the five inventory control skills possessed by the operators. Therefore, the null
hypothesis of no significant difference for the five items was accepted.
The result of the Post Hoc test for the 11 items that are significant showed
that the source of difference for items 1, 4, 6, 7, 9, 12, 13 and 16 are small business
operators with HND/B.Sc qualification. This implied that business operators with
HND/B.Sc qualification possessed inventory valuation skill items 1, 4, 6, 7, 9, 12,
13 and 16 better than others. The source of difference for items 2, 8 and 14 are
small business operators with ND/NCE qualification. This means that business
operators with ND/NCE qualification possessed the inventory control skill items 2,
8 and 14 better than others.
Hypothesis Eleven
Qualification is not a significant source of difference in inventory valuation
skills possessed by small business operators.
The data for testing hypothesis eleven are presented in table 15 below.
Table 15
Analysis of Variance (ANOVA) of the Mean Ratings of the Respondents on Inventory
Valuation Skills Possessed according to Qualification
S/N
1
2
Items
Source of
Variance
Sum of
Squares
DF
Use
first-in-first-out
to B/W Groups
6.32
2
calculate the value of items in
the store
W/N Groups 139.33 266
Use
last-in-first-out
to B/W Groups
8.45
2
calculate the value of items in
the store
W/N Groups 280.59 266
Mean
Square F-Ratio F-Crit Decision
1.16
4.29
3.00
8.60
3.00
Post Hoc
Test
(Scheffe)
S*
HND/B.S
c
S*
HND/B.S
c
0.54
1.72
1.07
3
Use base stock method to B/W Groups 5.01
2
calculate the value of stock
W/N Groups 246.08 266
1.00
0.93
3.17
3.00
S*
ND/NCE
4
Use
standard
price
to
determine the value of closing
inventory
Calculate the value of
inventory using weighted
average method
Calculate the value of stock
using net realizable value
B/W Groups 0.85
2
W/N Groups 126.51 266
0.42
0.47
0.90
3.00
NS
-
B/W Groups 0.13
2
W/N Groups 177.15 266
1.06
0.29
0.23
3.00
NS
-
1.78
7.66
3.00
S*
HND/B.S
c
3.00
NS
-
S*
HND/B.S
c
5
6
B/W Groups
6.57
2
W/N Groups 120.76 266
0.47
7
Calculate the value of stock B/W Groups 0.33
2
using cost-plus method
W/N Groups 180.58 266
.16
0.67
1.24
8
Value inventory at lower of B/W Groups
13.45
2
cost
W/N Groups 275.59 266
1.72
16.60 3.00
0.57
9
Use inflated price of stock to B/W Groups
8.96
2
value inventory by including
all costs incurred till sold
W/N Groups 210.60 266
10 Value stocks at the expected B/W Groups 1.77
2
price for the next purchase
W/N Groups 174.88 266
11 Use market price method to B/W Groups
15.60
2
assign values to inventories
W/N Groups 201.53 266
1.98
7.19
3.00
0.88
0.65
1.34
3.00
1.30
9.37
3.00
S*
HND/B.S
c
NS
-
S*
HND/B.S
c
0.61
0.81
12
Value inventory at the oldest prices
B/W Groups
W/N Groups
0.57
192.66
2
266
0.28
0.72
1.39
3.00
NS
-
13
Value inventory based on more recently
acquired stock prices.
B/W Groups
W/N Groups
6.42
120.90
2
266
1.71
0.67
4.51
3.00
S*
ND/NCE
The analysis of variance (ANOVA) presented in Table 15 above showed that
the F-ratio values of 8 out of 13 items were from 3.17 – 16.60 which are all greater
than the F-critical value of 3.00 at 0.05 level of significance. This indicated that,
there are significant differences in the mean ratings of the responses of the small
business operators with SSCE/NECO, ND/NCE and HND/B.Sc qualification on
the 8 inventory valuation skills possessed by the operators. Therefore, the null
hypothesis of no significant difference for the 8 items was rejected.
On the other hand, the F-ratio values of the remaining five items,
specifically items 4, 5, 7, 10 and 12 are 0.90, 0.23, 1.24, 1.34 and 1.39 respectively
which are less than the F-critical value of 3.00 at 0.05 level of significance,
indicating that there are no significant differences in the mean ratings of the
respondents with SSCE/NECO, ND/NCE and HND/B.Sc qualification on the five
inventory valuation skills possessed by the operators. Therefore, the null
hypothesis of no significant difference for the five items was accepted.
The result of the Post Hoc test for the 8 items that are significant showed
that the source of difference for items 1, 2, 6, 8, 9 and 11 are small business
operators with HND/B.Sc qualification. This indicated that business operators with
HND/B.Sc qualification possessed inventory valuation skill items 1, 2, 6, 8, 9 and
11 better than others. The source of difference for items 3 and 13 are small
business operators with ND/NCE qualification. This implied that business
operators with ND/NCE qualification possessed the inventory valuation skill items
3 and 13 better than others.
Hypothesis Twelve
Qualification is not a significant source of difference in price determination
skills possessed by small business operators.
The data for testing hypothesis twelve are presented in table 16 below.
Table 16
Analysis of Variance (ANOVA) of the Mean Ratings of the Respondents on Price
Determination Skills Possessed according to Qualification
S/N
Items
Source of
Variance
Sum of
Squares
DF
Post Hoc
Mean
Test
Square F-Ratio F-Crit Decision (Scheffe)
1
Calculate cost per unit of item
B/W Groups
W/N Groups
8.61
208.53
2
266
1.30
0.81
6.37
3.00
S*
HND/B.Sc
2
Calculate the total cost of product or
service
B/W Groups
W/N Groups
12.57
180.66
2
266
1.28
0.72
10.39
3.00
S*
HND/B.Sc
3
Compute prime cost by adding direct
costs
B/W Groups
W/N Groups
6.42
120.90
2
266
1.71
0.87
3.51
3.00
S*
ND/NCE
4
5
6
7
8
9
10
11
12
Calculate overheads by subtracting
the sum of factory, administrative,
selling and distribution expenses for
Add direct wages to determine prime
cost
B/W Groups
W/N Groups
0.96
141.05
2
266
0.48
0.53
0.91
3.00
NS
-
B/W Groups
W/N Groups
7.33
173.58
2
266
1.16
0.67
4.24
3.00
S*
HND/B.Sc
Calculate profit or loss by
subtracting the cost of sales from
total sales
Identify and allocate direct cost by
adding direct and indirect materials,
wages and indirect expenses
Aggregate direct material cost, direct
wages and direct expenses to arrive
at prime cost
Aggregate indirect material cost,
indirect-wages and indirect expenses
to arrive at overhead cost
Calculate the selling price using
mark-up system
B/W Groups
W/N Groups
0.57
192.66
2
266
0.28
0.72
0.39
3.00
NS
-
B/W Groups
W/N Groups
8.96
210.60
2
266
1.98
0.81
9.19
3.00
S*
HND/B.Sc
B/W Groups
W/N Groups
8.40
285.03
2
266
2.20
1.08
3.22
3.00
S*
HND/B.Sc
B/W Groups
W/N Groups
15.35
332.57
2
266
2.67
1.28
12.07
3.00
S*
HND/B.Sc
B/W Groups
W/N Groups
6.73
279.01
2
266
3.36
1.04
3.21
3.00
S*
HND/B.Sc
Calculate the selling price by
deducting the discount allowed to
arrive at agreed invoice price
Subtract selling expenses from gross
profit to arrive at net profit.
B/W Groups
W/N Groups
1.88
245.48
2
266
0.94
0.92
1.01
3.00
NS
-
B/W Groups
W/N Groups
4.02
126.33
2
266
2.01
0.47
4.24
3.00
S*
HND/B.Sc
The analysis of variance (ANOVA) presented in Table 16 above showed that
the F-ratio values of 9 out of 12 items were from 3.21 – 12.07 which are all greater
than the F-critical value of 3.00 at 0.05 level of significance. This showed that,
there are significant differences in the mean ratings of the respondents with
SSCE/NECO, ND/NCE and HND/B.Sc qualification on the 9 price determination
skills possessed by the operators. Therefore, the null hypothesis of no significant
difference for the 9 items was rejected.
On the other hand, the F-ratio values of the remaining three items,
specifically items 4, 6 and 11 are 0.91, 0.39 and 1.01 respectively which are less
than the F-critical value of 3.00 at 0.05 level of significance, indicating that there
are no significant differences in the mean ratings of the responses of the small
business operators with SSCE/NECO, ND/NCE and HND/B.Sc qualification on
the three (3) price determination skills possessed by the operators. Therefore, the
null hypothesis of no significant difference for the three items was accepted.
The result of the Post Hoc test for the 9 items that are significant showed
that the source of difference for items 1, 2, 5, 7, 8, 9, 10 and 12 are small business
operators with HND/B.Sc qualification. This implied that business operators with
HND/B.Sc qualification possessed price determination skill items 1, 2, 5, 7, 8, 9,
10 and 12 better than others. The source of difference for item 3 is small business
operators with ND/NCE qualification. This implied that business operators with
ND/NCE qualification possessed the price determination skill item 3 better than
others.
Hypothesis Thirteen
Location is not a significant source of difference in price determination skills
possessed by small business operators.
The data for testing hypothesis thirteen are presented in table 17 below.
Table 17
The t-Test Statistic of the Mean Ratings of the Respondents on Price
Determination Skills Possessed according to Location
Urban
S/N
1
2
3
4
5
6
7
8
9
11
12
Rural
Item statements.
X1
S12
X2
S2 2
tCal
Calculate cost per unit of item
Calculate the total cost of product or
service
Compute prime cost by adding direct
costs
Calculate overheads by subtracting the
sum of factory, administrative, selling
and distribution expenses for
Add direct wages to determine prime
cost
Calculate profit or loss by subtracting
the cost of sales from total sales
Identify and allocate direct cost by
adding direct and indirect materials,
wages and indirect expenses
Aggregate direct material cost, direct
wages and direct expenses to arrive at
prime cost
Aggregate indirect material cost,
indirect-wages and indirect expenses to
arrive at overhead cost
Calculate the selling price using markup system
Calculate the selling price by deducting
2.48
2.54
0.89
0.81
2.49
2.44
0.91
0.92
0.12
0.84
1.96
1.96
NS
NS
3.17
0.69
3.23
0.67
-0.62
1.96
NS
2.41
0.71
2.25
0.76
1.74
1.96
NS
2.80
0.81
2.77
0.84
0.21
1.96
NS
2.53
0.81
2.44
0.92
0.84
1.96
NS
2.61
0.89
2.63
0.93
0.10
1.96
NS
2.19
1.06
2.15
1.01
0.46
1.96
NS
3.04
1.16
3.11
1.09
-0.51
1.96
NS
2.24
1.05
2.14
0.99
0.75
1.96
NS
2.43
0.98
2.39
0.90
0.22
1.96
NS
t-Tab Rmks
the discount allowed to arrive at agreed
invoice price
The data presented in Table 17 above that all the twelve price determination
skills possessed by small business operators had their calculated t-values ranged
from –0.62 to 1.74 which are all less than t-table value of 1.96 at 0.05 level of
significance and at 267 degree of freedom (df). This indicated that there were no
significant differences in the mean ratings of the responses of urban and ruralbased small business operators on the twelve price determination skills possessed
by small business operators in Anambra State. Therefore, the null hypothesis of no
significant difference in the mean ratings of the two groups of respondents on the
items was accepted.
Findings of the Study.
The following findings emerged from the study based on the research
questions answered and the hypotheses tested.
The findings are presented under the following sub-headings:
Record-keeping skills possessed by small business operators
The findings of this study on research question one showed that the level at
which the small business operators possessed
record- keeping skills are
significantly lower than the level at which the skills are perceived as important for
operating small businesses in Anambra state. The 13 items on the record keeping
skills that their expressed possessions were significantly low include:
1. Use double entry to record transactions
2. Record all cash transactions in the cash book
3. Debit cash sales in the cash book and post entry to credit side of the ledger
4. Credit cash purchases in the cash book and debit the ledger account
5. Record credit sales in the sales day book
6. Post the sundry sales to ledger
7. Post the sundry purchases in the ledger account
8. Use return inwards book to record goods returned by customers
9. Enter transactions to subsidiary book from source documents
10. Maintain store ledger account
11. Use bin card to record stock movement
12. Record goods sent back to suppliers in the return outward book
13. Post transactions to various accounting books as they occur.
Inventory control skills possessed by small business operators
The findings of this study on research question two revealed that the level at
which the small business operators possessed 14 out of 16 inventory control skills
are significantly lower than the level at which the skills are perceived as important
for operating small businesses in Anambra state. The 14 inventory control skills
that the expressed possessions are significantly low include:
1. Calculate the minimum stock level to avoid stock outs
2. Calculate the maximum stock level to determine economic order quantity
3. Calculate the reorder level of stock to determine the maximum usage of
stock and the lead time
4. Calculate the lead time to determine the period of reordering of stock
5. Use carrying cost and ordering cost to calculate the total cost of stock
6. Use period stock taking to determine the quantity of items in the store
7. Use good storage facilities to store inventories to avoid inventory damage
resulting to loss of profit
8. Place order for moving inventory at the right quantity and quality
9. Keep buffer stock to avoid loss of customers
10. Record the insurance and usage of inventory
11. Set inventory prices as low as possible to attract customers
12. Take physical count of inventory to manage deterioration& obsolescence
13. Store moving inventory to minimize holding cost
14. Frequent check of stock to prevent and control fraud.
Inventory valuation skills possessed by small business operators
The findings of this study on research question three showed that the level at
which the small business operators possessed 10 out of 13 inventory valuation
skills are significantly lower than the level at which the skills are perceived
important for managing small businesses in Anambra state. The 10 inventory
valuation skill that the level of expressed possessions is significantly low includes:
1. Use first-in-first-out to calculate the value of items in the store
2. Use last-in-first-out to calculate the value of items in the store
3. Use base stock method to calculate the value of stock
4. Use standard price to determine the value of closing inventory
5. Calculate the value of inventory using weighted average method
6. Calculate the value of stock using cost-plus method
7. Value inventory at lower of cost
8. Value stocks at the expected price for the next purchase
9. Use market price method to assign values to inventories
10. Value inventory at the oldest prices
Price determination skills possessed by small business operators
The findings of this study on research question four showed that the level at
which the small business operators possessed 10 out of 12 price determination
skills are significantly lower than the level at which the skills are perceived as
important for operating small businesses in Anambra state. The 10 price
determination skills that the expressed possessions are significantly low include:
1. Calculate cost per unit of item
2. Calculate the total cost of product or service
3. Calculate overheads by subtracting the sum of
factory, administrative,
selling and distribution expenses for total cost
4. Add direct wages to determine prime cost
5. Calculate profit or loss by subtracting the cost of sales from total sales
6. Identify and allocate direct cost by adding direct and indirect materials,
wages and indirect expenses
7. Aggregate direct material cost, direct wages and direct expenses to arrive at
prime cost
8. Calculate the selling price using mark-up system
9. Calculate the selling price by deducting the discount allowed to arrive at
agreed invoice price
10. Subtract selling expenses from gross profit to arrive at net profit.
Hypothesis One
The findings of the study on hypothesis one showed that the F-ratio values
of all the 15 items were between 0.01 - 2.95 which are all less than the F-critical
value of 3.00 at 0.05 level of significance. This implied that, there are no
significant differences in the mean ratings of the responses of the small business
operators with 18 – 30 years, 31 – 40 years and above 41 years of age on the 15
record keeping skills possessed by the operators.
Hypothesis Two
The findings of the study on hypothesis two showed that the F-ratio values
of 14 out of 16 skill items were between 0.13 - 2.23 which are less than the Fcritical value of 3.00 at 0.05 level of significance. This implied that, there are no
significant differences in the mean ratings of the respondents with 18 – 30 years,
31 – 40 years and above 41 years of age on the 14 inventory control skills
possessed by the operators. On the other hand, the F-ratio values of the remaining
two items, specifically items 8 and 14 are 3.33 and 3.29 respectively. These are
greater than the F-critical value of 3.00 a 0.05 level of significance, indicating that
there are significant differences in the mean ratings of the respondents with 18 – 30
years, 31 – 40 years and above 41 years of age on the two inventory control skills
possessed by the operators.
Hypothesis Three
The findings of the study on hypothesis three showed that the F-ratio values
of all the 13 items were between 0.13 - 2.23 which are less than the F-critical
value of 3.00 at 0.05 level of significance. This indicated that, there are no
significant differences in the mean ratings of the respondents with 18 – 30 years,
31 – 40 years and above 41 years of age on the inventory valuation skills possessed
by the operators.
Hypothesis Four
The findings of the study on hypothesis four showed that the F-ratio values
of 11 out of 12 skill items were between 0.34 - 2.42 which are less than the Fcritical value of 3.00 at 0.05 level of significance. This implied that, there are no
significant differences in the mean ratings of the responses of the small business
operators with 18 – 30 years, 31 – 40 years and above 41 years of age on the level
at which the 11 price determination skills are being possessed by the operators. On
the other hand, the F-ratio value of the remaining one item, specifically item 11 is
6.98 which is greater than the F-critical value of 3.00 at 0.05 level of significance.
This indicated that there is significant difference in the mean response of small
business operators with 18 – 30 years, 31 – 40 years and above 41 years of age on
the level at which that particular price determination skill is possessed by the
business operators.
Hypothesis Five
The findings of the study on hypothesis five revealed that the F-ratio values
of 10 out of 15 items were from 3.21 - 15.30 which are greater than the F-critical
value of 3.00 at 0.05 level of significance. This implied that, there are significant
differences in the mean ratings of the responses of the small business operators
with 1 - 5years, 6 – 10 years and above 10 years of experience on the 10 record
keeping skills possessed by the operators. On the other hand, the F-ratio values of
the remaining five items, specifically items 5, 7, 9, 11 and 14 are 0.65, 2.67, 0.42,
1.65 and 0.67 respectively which are less than the F-critical value of 3.00 at 0.05
level of significance, indicating that there are no significant differences in the mean
ratings of the respondents with 1 - 5years, 6 – 10 years and above 10 years of
experience on the five record-keeping skills possessed by the operators.
Hypothesis Six
The findings of the study on hypothesis six showed that the F-ratio values of
10 out of 10 out of 16 items were between 3.25 - 27.87 which are greater than the
F-critical value of 3.00 at 0.05 level of significance. This indicated that, there are
significant differences in the mean ratings of the respondents with 1 - 5years, 6 –
10 years and above 10 years of experience on the 10 inventory control skills
possessed by the operators. On the other hand, the F-ratio values of the remaining
six items, specifically items 2, 3, 5, 7, 8, and 15 are 2.63, 1.54, 0.56, 1.57, 1.68 and
1.16 respectively which are less than the F-critical value of 3.00 at 0.05 level of
significance, indicating that there are no significant differences in the mean ratings
of the respondents with 1 - 5years, 6 – 10 years and above 10 years of experience
on the six inventory control skills possessed by the operators.
Hypothesis Seven
The findings of the study on hypothesis seven revealed that the F-ratio
values of 9 out of 13 items were between 3.02 - 30.28 which are greater than the Fcritical value of 3.00 at 0.05 level of significance. This indicated that, there are
significant differences in the mean ratings of the respondents with 1 - 5years, 6 –
10 years and above 10 years of experience on the 9 inventory valuation skills
possessed by the operators. On the other hand, the F-ratio values of the remaining
four items, specifically items 2, 4, 6 and 8 are 1.02, 0.41, 1.54 and 1.02 and
respectively which are less than the F-critical value of 3.00 at 0.05 level of
significance, indicating that there are no significant differences in the mean ratings
of the responses of the small business operators with 1 - 5years, 6 – 10 years and
above 10 years of experience on the four inventory valuation skills possessed by
the operators.
Hypothesis Eight
The findings of the study on hypothesis eight showed that the F-ratio values
of 9 out of 12 items were between 3.91 - 13.23 which are
greater than the F-
critical value of 3.00 at 0.05 level of significance. This implied that, there are
significant differences in the mean ratings of the respondents with 1 - 5years, 6 –
10 years and above 10 years of experience on the 9 price determination skills
possessed by the operators. On the other hand, the F-ratio values of the remaining
three items, specifically items 3, 6 and 8 are 1.91, 2.67 and 2.23 respectively which
are less than the F-critical value of 3.00 at 0.05 level of significance, indicating that
there are no significant differences in the mean ratings of the respondents with 1 5years, 6 – 10 years and above 10 years of experience on the three price
determination skills possessed by the operators.
Hypothesis Nine
The findings of the study on hypothesis nine revealed that the F-ratio values
of 11 out of 15 items were between 3.08 – 7.63 which are all greater than the Fcritical value of 3.00 at 0.05 level of significance. This implied that, there are
significant differences in the mean ratings of the respondents with SSCE/NECO,
ND/NCE and HND/B.Sc qualification on the 11 record-keeping skills possessed by
the operators. On the other hand, the F-ratio values of the remaining four items,
specifically items 4, 7, 9 and 14 are 0.19, 1.69, 0.25 and 0.39 respectively which
are less than the F-critical value of 3.00 at 0.05 level of significance, indicating that
there are no significant differences in the mean ratings of the respondents with
SSCE/NECO, ND/NCE and HND/B.Sc qualification on the four record-keeping
skills possessed by the operators.
Hypothesis Ten
The findings of the study on hypothesis ten showed that the F-ratio values of
11 out of 16 items were between 3.46 – 11.07 which are greater than the F-critical
value of 3.00 at 0.05 level of significance. This indicated that, there are significant
differences in the mean ratings of the respondents with SSCE/NECO, ND/NCE
and HND/B.Sc qualification on the 11 inventory control skills possessed by the
operators. On the other hand, the F-ratio values of the remaining five items,
specifically items 3, 5, 10, 11 and 15 are 0.35, 1.46, 1.40, 2.60 and 0.55
respectively which are less than the F-critical value of 3.00 at 0.05 level of
significance, indicating that there are no significant differences in the mean ratings
of the respondents with SSCE/NECO, ND/NCE and HND/B.Sc qualification on
the five inventory control skills possessed by the operators.
Hypothesis Eleven
The findings of the study on hypothesis eleven revealed that the F-ratio
values of 8 out of 13 items were between 3.17 – 16.60 which are greater than the
F-critical value of 3.00 at 0.05 level of significance. This indicated that, there are
significant differences in the mean ratings of the respondents with SSCE/NECO,
ND/NCE and HND/B.Sc qualification on the 8 inventory valuation skills possessed
by the operators. On the other hand, the F-ratio values of the remaining five items,
specifically items 4, 5, 7, 10 and 12 are 0.90, 0.23, 1.24, 1.34 and 1.39 respectively
which are less than the F-critical value of 3.00 at 0.05 level of significance,
indicating that there are no significant differences in the mean ratings of the
responses of the small business operators with SSCE/NECO, ND/NCE and
HND/B.Sc qualification on the five inventory valuation skills possessed by the
operators.
Hypothesis Twelve
The findings of the study on hypothesis twelve showed that the F-ratio
values of 9 out of 12 items were between 3.21 – 12.07 which are all greater than
the F-critical value of 3.00 at 0.05 level of significance. This showed that, there
are significant differences in the mean ratings of the respondents with
SSCE/NECO, ND/NCE and HND/B.Sc qualification on the 9 price determination
skills possessed by the operators. On the other hand, the F-ratio values of the
remaining three items, specifically items 4, 6 and 11 are 0.91, 0.39 and 1.01
respectively which are less than the F-critical value of 3.00 at 0.05 level of
significance, indicating that there are no significant differences in the mean ratings
of the respondents with SSCE/NECO, ND/NCE and HND/B.Sc qualification on
the three (3) price determination skills possessed by the operators.
Hypothesis Thirteen
The findings of the study on hypothesis thirteen revealed that all the twelve
price determination skills possessed by small business operators had their
calculated t-values ranged from –0.62 to 1.74 which are less than t-table value of
1.96 at 0.05 level of significance and at 267 degree of freedom (df). This indicated
that there were no significant differences in the mean ratings of the urban and rural
respondents on the twelve price determination skills possessed by small business
operators in Anambra State.
Discussion of findings
The findings of this study on research questions answered are discussed as
follows:
Record-keeping skills possessed by small business operators
The findings of this study as regards research question one showed that the
record keeping skills possessed by small business operators in Anambra state are
significantly lower than the level at which the skills are rated as important for
operating small businesses. The skills include: debiting cash sales in the cash book
and post entry to credit side of the ledger, crediting cash purchases in the cash
book and debiting the ledger account, posting the sundry sales to ledger, recording
goods purchased on credit in the purchases day book, posting the sundry purchases
in the ledger account, using return inwards book to record goods returned by
customers, entering transactions to subsidiary book from source documents,
maintaining store ledger account, using bin card to record stock movement,
recording goods sent back to suppliers in the return outward book and posting
transactions to various accounting books as they occur.
Good record keeping is essential for success of business because it supports
all communication and decision making. Ekwere (2005) asserted that businesses
are established for trading and profit making; and the success of the business
depends on the accuracy of records keeping. Good records keeping deals with
financial management of a business enterprise. Hence the findings of this study on
recording keeping is in agreement with the findings of Otah (2000) who conducted
a study on the working capital management of small scale enterprises in Owerri
metropolis of Imo State and found that there were inadequate and up-to-date
records keeping among the small and medium scale enterprise operators in the
area.
Inventory control skills possessed by small business operators
The findings of this study as regards research question two showed that the
inventory control skills possessed by small business operators in Anambra state are
significantly lower than the level at which the skills are rated important for
operating small businesses. These inventory control skills include: Calculating the
minimum stock level to avoid stock outs, calculating the maximum stock level to
determine economic order quantity, calculating the reorder level of stock to
determine the maximum usage of stock and the lead time, calculating the lead time
to determine the period of reordering of stock, using carrying cost and ordering
cost to calculate the total cost of stock, using period stock taking to determine the
quantity of items in the store, placing order for moving inventory at the right
quantity and quality, recording the insurance and usage of inventory, calculating
carrying cost to minimize loss, setting inventory prices as low as possible to attract
customers and storing moving inventory to minimize holding cost.
Stock control is a stock management process which is concerned mainly
with the identifying needed stock, quality and quantity, identifying the suppliers
and the best prices obtainable, identifying the best conveyance method to reduce
cost and breakage among others. The findings of this study on stock control agreed
with the submission of Agara (2005) who reported that stock control practices are
inventory management practices that are often times lacking among small and
medium scale business owners, hence their high rate of business failure. In
addition, the findings of this study is also in conformity with that of Jhingan (2004)
who revealed the inability of the most operators of the SMEs to adopt adequate
stock and cash management practices to check and maintain balances in stock
level. Therefore, it is imperative that small business operators should effectively
manage their stock for the success of their businesses.
Inventory valuation skills possessed by small business operators
The findings of this study in respect to research question three showed that
the inventory valuation skills possessed by small business operators in Anambra
state are significantly lower than the level at which the skills are rated important
for operating small businesses. These inventory valuation skills include: using
first-in-first-out to calculate the value of items in the store, using last-in-first-out to
calculate the value of items in the store, using base stock method to calculate the
value of stock, using standard price to determine the value of closing inventory,
calculating the value of inventory using weighted average method, calculating the
value of stock using net realizable value, calculating the value of stock using costplus method, valuing inventory at lower of cost, using inflated price of stock to
value inventory by including all costs incurred till sold, valuing stocks at the
expected price for the next purchase and valuing inventory at the oldest prices.
Inventory valuation is a statement that provides information or monetary
value about the value of goods held in inventory (Brag, 2010). Inventory valuation
is very important in business management and Pandy (2007) maintained that
valuing inventory requires the determination of the physical goods to include in
inventory, the cost to include in inventory and the cost flow assumptions to adopt.
The findings of this study on inventory valuation agreed with the findings of
Anayochukwu (1991) who appraised the working capital management of small
firms in Enugu State. The author found out that operators of small businesses in the
area did not utilize efficient cash management practices and efficient inventory
management techniques. The author therefore concluded that the poor control over
stock among small firms lead to carrying excessive stock and consequently
business failure.
Price determination skills possessed by small business operators
The findings of this study as regards research question four showed that the
price determination skills possessed by small business operators in Anambra state
are significantly lower than the level at which the skills are rated important for
managing small businesses. The skills include: calculating cost per unit of item,
computing prime cost by adding direct costs, calculating overheads by subtracting
the sum of factory, administrative, selling and distribution expenses for total cost,
calculating profit or loss by subtracting the cost of sales from total sales, identify
and allocate direct cost by adding direct and indirect materials, wages and indirect
expenses, aggregating direct material cost, direct wages and direct expenses to
arrive at prime cost, aggregating indirect material cost, indirect-wages and indirect
expenses to arrive at overhead cost, calculating the selling price using mark-up
system and calculating the selling price by deducting the discount allowed to arrive
at agreed invoice price.
The findings of this study on price determination skills is in line with the
findings of Okafor (2010) whose findings showed that small business operators do
not utilized pricing strategies such as the use of skimming method, the use of
complementary pricing for two different grades of products, the use of discount
and allowances to customers of the products, calculating overheads by subtracting
the sum of factory and profit or loss by subtracting the cost of sales from total
sales. The findings of this study is also in consonance with the result of Ugwu
(2005) who found that the marketing of agricultural products in Nsukka LGA have
not been effective because of many factors among which poor pricing practices are
included.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
This chapter presented the summary of the statement of the problem,
purpose of the study, procedure used for the study, major findings of the study,
conclusion based on the findings, implications of the study, recommendation for
implementation and suggestions for further study.
Restatement of the Problem
The rate at which businesses fail today is quite alarming. Business failure
could be attributed to lack of appropriate skills and also to some of the anti-social
behavior among the youths such as incessant robbery attacks, kidnapping in the
state that disillusion the small business operators who may lose money to robbers
and sustain injuries or even die. Ndulue (2002) substantiated that in practice, many
small business units in the developing countries do not keep proper accounting
records. Record-keeping, inventory management and price determination are
necessary for the promotion of business activities through the information revealed
on daily basis.
Many small businesses have an excessive amount of working capital tied
up in an accumulation of needless inventory. Not only that, it is expensive to carry
excess inventory for extended period of time, but the money invested in it could be
put to more productive uses.
Improper pricing is another factor that causes business failure. It is expected
that small business operators should be able to price their products so
as to maximize profit. However, in most144
cases, even the so called multi-national
corporations also make the mistake in setting their prices too high or too low.
Osuala (2004) noted that most small businesses tend to under price their goods and
services resulting in lower revenues and profits. Based on these notable problems,
this study deemed it necessary to determine the cost accounting skill needs of small
business operators by determining what they need and establishing what they
possess in order to help them fill the existing skill gap to reduce business failure
and as well increase performance.
Purpose of the Study
The major purpose of this study was to determine the cost accounting skills
needs of small business operators in Anambra State. Specifically, the study sought
to determine:
1.
the perceived level of importance and expressed level of possession of
record-keeping skills by small business operators.
2.
the perceived level of importance and expressed level of possession of
inventory control skills by small business operators.
3.
the perceived level of importance and expressed level of possession of
inventory valuation skills by small business operators.
4.
the perceived level of importance and expressed level of possession of price
determination skills by small business operators.
Summary of the Procedure used for the Study
Four research questions were developed and answered by the study while
thirteen null hypotheses were formulated and tested at 0.05 level of significance.
The study adopted descriptive survey research design and was carried out in
Anambra State. The population for this study consists of 280 registered small
business operators in Anambra State. Due to the manageable size of the
population, the entire 280 registered small business operators were used in the
study; therefore, there was no sampling. The instrument for data collection was a
structured 56-item questionnaire. The question was divided into five sections (A E). Section A was used to obtain the personal data of the respondents. Sections B,
C, D and E were further structured into bipolar scale of perceived importance and
expressed possession, to obtain the required data on record-keeping, inventory
control, inventory valuation and price determination skills of the small business
operators respectively.
The instrument was face-validated by three experts. One from the Internal
Audit Department, University of Nigeria Nsukka and two from the Department of
Vocational Teacher Education, University of Nigeria, Nsukka. The suggestions of
the validates were utilized in developing the final draft of the instrument used for
data collection. To determine the internal consistency of the instrument, Cronbach
Alpha reliability technique was adopted. Cronbach Alpha coefficient of 0.78 was
obtained for accounting record-keeping skills, 0.83 for inventory control skills,
0.80 for inventory valuation skills while 0.75 was obtained for price determination
skills needed for small business operation.
For data collection, the researcher, with the help of three research assistants
facilitated the process of data collection for the study. Out of the 280 copies of the
questionnaire administered, 269 copies were returned and appropriately filled and
was used for data analysis. The data collected were analyzed using Mean and
Correlated t-test for answering the research questions while t-test statistic and
Analysis of Variance (ANOVA) were use in testing the hypotheses at 0.05 level of
significance.
Major Findings of the Study
The study found that the skills possessed by the small business operators in
Anambra state are significantly low in 47 out of the 56 cost accounting skills
identified for business operation in the State.
Specifically, the study found that:
1. The skills possessed by the small business operators are significantly low in
13 out of the 15 identified record keeping skills.
2. The skills possessed by the small business operators are significantly low in
14 out of the16 identified inventory control skills.
3. The skills possessed by the small business operators are significantly low in
10 out of the 13 identified inventory valuation skills.
4. The skills possessed by the small business operators are significantly low in
10 out of the 12 identified price determination skills.
5. There are no significant differences in the mean ratings of the respondents
with 18 – 30 years, 31 – 40 years and above 41 years of age on the record
keeping skills possessed by the operators.
6. There are no significant differences in the mean ratings of the respondents
with 18 – 30 years, 31 – 40 years and above 41 years of age on 14 out of 16
inventory control skills possessed by the operators whereas, there are
significant differences in the mean ratings of the responses of the small
business operators on the remaining inventory control skills possessed by the
operators.
7. There are no significant differences in the mean ratings of the respondents
with 18 – 30 years, 31 – 40 years and above 41 years of age on all the 13
inventory valuation skills possessed by the operators.
8. There are no significant differences in the mean ratings of the respondents
with 18 – 30 years, 31 – 40 years and above 41 years of age on the level at
which the 11 out of the 12 identified price determination skills are being
possessed by the operators whereas there is significant difference in the
mean response of small business operators on the level at which the
remaining one item of price determination skill is possessed by the business
operators.
9. There are significant differences in the mean ratings of the respondents with
1 - 5years, 6 – 10 years and above 10 years of experience on the 10 out of
the 15 record keeping skills possessed by the operators whereas, there are no
significant differences in the mean ratings of the respondents on the
remaining five record-keeping skills possessed by the operators.
10. There are significant differences in the mean ratings of the respondents with
1 - 5years, 6 – 10 years and above 10 years of experience on 10 out of the 16
inventory control skills possessed by the operators. On the other hand, there
are no significant differences in the mean ratings of the respondents on the
remaining six inventory control skills possessed by the operators.
11. There are significant differences in the mean ratings of the respondents with
1 - 5years, 6 – 10 years and above 10 years of experience on 9 out of the 13
inventory valuation skills possessed by the operators; whereas there are no
significant differences in the mean ratings of the respondents on the
remaining four inventory valuation skills possessed by the operators.
12. There are significant differences in the mean ratings of the small business
operators with 1 - 5years, 6 – 10 years and above 10 years of experience on
9 out of 12 price determination skills possessed by the operators. On the
other hand, there are no significant differences in the mean ratings of the
small business operators on the remaining three price determination skills
possessed by the operators.
13. There are significant differences in the mean ratings of the respondents with
SSCE/NECO, ND/NCE and HND/B.Sc qualification on 11 out of the 15
record-keeping skills possessed by the operators. On the other hand, there
are no significant differences in the mean ratings of the respondents on the
remaining four record-keeping skills possessed by the operators.
14. There are significant differences in the mean ratings of the small business
operators with SSCE/NECO, ND/NCE and HND/B.Sc qualification on 11
out of the 16 inventory control skills possessed by the operators main while;
there are no significant differences in the mean ratings of the small business
operators on the remaining five inventory control skills possessed by the
operators.
15. There are significant differences in the mean ratings of the respondents with
SSCE/NECO, ND/NCE and HND/B.Sc qualification on 8 out of the 13
inventory valuation skills possessed by the operators. On the other hand,
there are no significant differences in the mean ratings of the responses of
the small business operators on the remaining five
skills possessed by the operators.
inventory valuation
16. There are significant differences in the mean ratings of the small business
operators with SSCE/NECO, ND/NCE and HND/B.Sc qualification on 9 out
of the 12 price determination skills possessed by the operators. On the other
hand, there are no significant differences in the mean ratings of the small
business operators on the remaining three price determination skills
possessed by the operators.
17. There are no significant differences in the mean ratings of urban and ruralbased small business operators on the twelve price determination skills
possessed by small business operators in Anambra State.
Implications for Business Education
The successes of small businesses involve effective application of
accounting practices in the business operations. Therefore, the findings of this
study have positive implications for business education in the sense that the study
will create the awareness and knowledge to students and lecturers of the
importance of cost accounting skills for increase income of the operators of the
small businesses in the country and Anambra state in particular.
Empirical studies on the cost accounting skill needs of small business
operators are grossly insufficient. Therefore, lecturers and students of Business
education would find in this study a valuable literature for scholarly investigations.
Business education lecturers in particular will be more informed with the wealth of
information that were made available by this study for equipping the students to be
successful small business operators on graduation. This is because, with the current
unemployment among Nigerian graduates in the labour market, students of
Business education on graduation could establish small businesses and be
successful through effective application of cost accounting skills for economic
independence in the study area. Nigerian environment is very supportive for
growth and development of small businesses due to the readily available markets
for products and services. Therefore, graduates of business education should be
encouraged to take the advantage of the profitability of small and medium scale
businesses in the country for sustainable living.
Conclusion
This study was carried out to determine the cost accounting skills needs of
small business operators in Anambra State. In carrying out the study, the study
identified and compared the level of perceived importance of the cost accounting
skills with the level of expressed possession of the skills by the small operators. It
was therefore found that record-keeping, inventory control, inventory valuation
and price determination skills
possessed by the small business operators in the
State are significantly very low. Based on these findings, the study therefore
concluded that some of the factors responsible for the frequent business failure
among the small business operators in the state are inadequate record keeping
skills, poor inventory control and valuation skills as well as improper pricing skills.
The study therefore determined the cost accounting skills needed for successful
small business operation.
Recommendations
Based on the findings of this study and conclusions drawn from the study,
the following recommendations were made as follows:
1. Operators of small businesses in the state should be subjected to short
training on cost accounting skills needed for business operations.
2. There should be regular workshops organised by experts and academics to
sensitize the small business operators on the importance of cost accounting
skills in their business performance.
3. The federal and state government should ensure the provision of enabling
business environment for growth and development of the small and medium
business operators if they must continue in their role of employment creation
and poverty reduction in the country and Anambra State in particular.
Suggestions for Further Study
The following suggestions were made for further studies:
1. The current study should be replicated in other Southeastern States such as
Enugu, Abia and Imo States where there are high rate of small and medium
scale businesses.
2. Strategies for enhancing the application of cost accounting skills among
small business operators in Anambra State.
3. In-service training needs of Business education lecturers for effective
teaching of cost accounting in tertiary institutions in Southeastern Nigeria.
4. Identification of cost accounting skill needs of large scale business operators
in Anambra State.
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APPENDIX A
Department of Vocational Teacher Education
(Business Education)
University of Nigeria
Nsukka
Enugu State
Dear Sir/Madam,
I am a postgraduate student of the above named department and institution,
currently undertaking a research work to determine the cost accounting skill needs
of small business operators in Anambra State.
The attached questionnaire is therefore designed to seek your opinion for the
successful completion of this study. Every information disclosed will be treated
with utmost confidentiality.
Thanks for your co-operation.
Yours faithfully
Umeji, Anthonia U.
APPENDIX B
RESEARCH INSTRUMENT
Instruction
Please check (P) the correct response to each of the following items as they apply
to you.
Section A: General Information
Location:
Rural
Urban
Number of years in Business/Experience:
1
-
5 Years
6
-
10 Years
10 years & above
Age:
18
-
31
-
30yrs
40yrs
40years & above
Educational Qualification:
SSCE/NECO
ND/NCE
HND/B.Sc, B.A, B.Ed
Industrial Sub-sector:
Manufacturing
Construction
Use the following guideline and respond to sections B – E on the perceived level of
importance of the cost accounting skills for the business operators.
Very Highly Important
(VHI) = 5
Highly Important
(HI) = 4
Averagely Important
(AI) = 3
Less Important
(LI) = 2
Not Important
(NI) = 1
Perceived level of cost accounting skills possessed by the business operators
Very Highly Possessed
(VHP) = 5
Highly Possessed
(HP)
=4
Averagely Possessed
(AP)
=3
Less Possessed
(LP)
=2
Not Possessed
(NP) = 1
Section B
Please indicate with a check (P) the option that suit your opinion. The item statements
were designed to determine the perceived level of importance of accounting record
keeping skills and possessed by small business operators.
S/N Item Statement
Possess the Skill to:
1
2
3
4
5
6
7
Use double entry to record
transactions
Record all cash transactions in
the cash book
Debit cash sales in the cash
book and post entry to credit
side of the ledger
Credit cash purchases in the
cash book and debit the ledger
account
Record credit sales in the sales
day book
Post the sundry sales to ledger
Record goods purchased on
credit in the purchases day
VHI HI AI LI NI
VHP HP AP
LP NP
8
9
10
11
12
13
14
15
book
Post the sundry purchases in
the ledger account
Use return inwards book to
record goods returned by
customers
Enter transactions to subsidiary
book from source documents
Post items to ledger applying
double entry principle
Maintain store ledger account
Use bin card to record stock
movement
Record goods sent back to
suppliers in the return outward
book
Post transactions to various
accounting books as they
occur.
Section C
Please indicate with a check (P) in the option that suits your opinion. The item
statements were designed to determine the perceived level of importance of stock control
skills and possessed by small business operators
S/N Item Statement
Possess the Skill to:
16
17
18
19
20
21
Calculate the minimum stock
level to avoid stock outs
Calculate the maximum stock
level to determine economic
order quantity
Calculate the reorder level of
stock to determine the
maximum usage of stock and
the lead time
Calculate the lead time to
determine the period of
reordering of stock
Use carrying cost and
ordering cost to calculate the
total cost of stock
Use period stock taking to
VHI HI AI LI
NI VHP
HP
AP LP NP
22
23
24
25
26
27
28
determine the quantity of
items in the store
Use continuous stock taking
to determine the quantity of
items in the store
Use good storage facilities to
store inventories to avoid
inventory damage resulting to
loss of profit
Place order for moving
inventory at the right quantity
and quality
Keep buffer stock to avoid
loss of customers
Record the insurance and
usage of inventory
Calculate carrying cost to
minimize loss
Set inventory prices as low as
possible to attract customers
29
Take physical count of inventory
to manage deterioration and
obsolescence
30
Store moving inventory to
minimize holding cost
Frequent check of stock to
prevent and control fraud.
31
Section D
Please indicate with a check (P) the option that suits your opinion. The item statements
were designed to determine the perceived level of importance of inventory valuation
skills and possessed by small business operators.
S/N Item Statement
VHI HI AI LI
Possess the Skill to:
32
Use first-in-first-out to calculate
the value of items in the store
33
Use
last-in-first-out
calculate the value of items
the store
Use base stock method
calculate the value of stock
Use
standard
price
34
35
to
in
to
to
NI VHP
HP
AP LP NP
36
37
38
39
40
41
42
43
44
determine the value of
closing inventory
Calculate the value of
inventory using weighted
average method
Calculate the value of stock
using net realizable value
Calculate the value of stock
using cost-plus method
Value inventory at lower of
cost
Use inflated price of stock to
value inventory by including
all costs incurred till sold
Value stocks at the expected
price for the next purchase
Use market price method to
assign values to inventories
Value inventory at the oldest
prices
Value inventory based on
more recently acquired stock
prices.
Section E
Please indicate with a check (P) the option that suit your opinion. The item statements
were designed to determine the perceived level of importance of price determination
skills and possessed by small business operators.
S/N Item Statement
Possess the Skill to:
45
46
47
48
49
Calculate cost per unit of item
Calculate the total cost of
product or service
Compute prime cost by
adding direct costs
Calculate
overheads
by
subtracting the sum of
factory, administrative, selling
and distribution expenses for
total cost
Add direct wages to determine
VHI HI AI LI
NI VHP
HP
AP
LP NP
50
51
52
53
54
55
56
prime cost
Calculate profit or loss by
subtracting the cost of sales
from total sales
Identify and allocate direct
cost by adding direct and
indirect materials, wages and
indirect expenses
Aggregate direct material
cost, direct wages and direct
expenses to arrive at prime
cost
Aggregate indirect material
cost,
indirect-wages
and
indirect expenses to arrive at
overhead cost
Calculate the selling price
using mark-up system
Calculate the selling price by
deducting
the
discount
allowed to arrive at agreed
invoice price
Subtract selling expenses from
gross profit to arrive at net
profit.
APPENDIX C
Results of Reliability Test
Section A: record-keeping skills
N
Cases
Valid
Excludeda
Total
%
15
100.0
0
15
.0
100.0
Reliability Statistics
Cronbach's
N of Items
Alpha
.783
15
Section B: inventory control skills
N
%
Cases
Valid
Excludeda
Total
15
0
15
100.0
.0
100.0
Reliability Statistics
Cronbach's
N of Items
Alpha
.826
16
C: inventory valuation skills
N
Valid
15
Cases
a
Excluded
0
Total
15
%
100.0
.0
100.0
Reliability Statistics
Cronbach's Alpha
.801
N of Items
13
Section D: Price determination skills
N
%
Valid
15
100.0
Cases
a
Excluded
0
.0
Total
15
100.0
Reliability Statistics
Cronbach's
Alpha
.754
N of Items
12
APPENDIX D
RESULT OF DATA ANALYSED
Answering the research questions
Research Question One:
Group Statistics
AItem1
AItem2
AItem3
AItem4
AItem5
AItem6
AItem7
AItem8
AItem9
AItem10
AItem11
AItem12
AItem13
AItem14
AItem15
Summary A
Categories
Importance
Possessed
Importance
Possessed
Importance
Possessed
Importance
Possessed
Importance
Possessed
Importance
Possessed
Importance
Possessed
Importance
Possessed
Importance
Possessed
Importance
Possessed
Importance
Possessed
Importance
Possessed
Importance
Possessed
Importance
Possessed
Importance
Possessed
Importance
Possessed
N
269
269
269
269
269
269
269
269
269
269
269
269
269
269
269
269
269
269
269
269
269
269
269
Mean
4.3792
2.2751
4.3680
3.9714
4.4275
2.4312
4.4721
2.4387
4.4312
3.0892
4.3792
2.5242
4.5279
3.2528
4.2862
1.9294
4.4796
2.4684
4.5725
2.0892
4.0829
3.2565
4.3309
Std. Deviation
.72617
1.17171
.85205
1.08447
.73260
.97731
.73566
.71820
.79170
.91394
.79015
.96794
.73057
.79366
.82625
.57191
.73082
1.11800
.58538
.86356
.78598
.71576
.78120
Std. Error Mean
.04428
.07144
.05195
.06612
.04467
.05959
.04485
.04379
.04827
.05572
.04818
.05902
.04454
.04839
.05038
.03487
.04456
.06817
.03569
.05265
.04792
.04364
.04763
269
2.3494
.92064
.05610
269
269
269
269
269
269
269
269
4.2268
2.3383
4.4684
2.5056
4.6134
3.0335
4.4230
2.5975
.87068
.96238
.66630
.84915
.57883
.80274
.30537
.23541
.05309
.05868
.04063
.05177
.03529
.04894
.01862
.01435
Independent Samples Test
Levene's Test for Equality
of Variances
AItem1
AItem2
Equal variances assumed
Equal variances assumed
F
.032
.642
Sig.
.030
.002
AItem3
Equal variances assumed
5.666
.000
AItem4
Equal variances assumed
.673
.413
AItem5
Equal variances assumed
.012
.215
AItem6
Equal variances assumed
2.634
.000
AItem7
Equal variances assumed
5.552
.019
AItem8
Equal variances assumed
5.874
.000
AItem9
AItem10
AItem11
AItem12
AItem13
AItem14
AItem15
Equal variances assumed
Equal variances assumed
Equal variances assumed
Equal variances assumed
Equal variances assumed
Equal variances assumed
Equal variances assumed
Summary A Equal variances assumed
3.130
7.817
.423
9.112
2.438
8.015
.767
4.597
.000
.000
.421
.003
.119
.000
.002
.000
t-test for Equality of Means
t
2.586
df
536
Sig. (2tailed)
.034
Std. Error
Difference
.08405
.586
447.407
.035
.08405
3.934
536
.003
.08409
.934
507.578
.006
.08409
6.806
536
.000
.07447
6.806
496.908
.000
.07447
2.439
536
.000
.06268
2.439
535.691
.000
.06268
3.603
536
.243
.07372
1.603
525.316
.310
.07372
4.349
536
.000
.07618
4.349
515.344
.000
.07618
1.387
536
.000
.06577
1.387
532.365
.000
.06577
2.468
536
.000
.06127
2.468
476.861
.000
.06127
4.696
536
.000
.08144
4.696
461.671
.000
.08144
2.039
536
.000
.06361
2.039
471.357
.000
.06361
.978
536
.100
.06482
.978
531.373
.110
.06482
4.915
536
.000
.07362
4.915
522.164
.000
.07362
3.866
536
.000
.07913
3.866
530.714
.000
.07913
2.826
536
.000
.06581
2.826
507.302
.000
.06581
5.183
536
.000
.06034
5.183
487.379
.000
.06034
4.653
536
.000
.02351
4.653
503.401
.000
.02351
Research Question Two:
Group Statistics
BItem1
BItem2
BItem3
BItem4
BItem5
BItem6
BItem7
BItem8
BItem9
BItem10
BItem11
BItem12
BItem13
BItem14
BItem15
BItem16
Categories
N
Mean
Std. Deviation
Std. Error Mean
Importance
269
4.4238
.79572
.04852
Possessed
269
2.6654
.88917
.05421
Importance
269
4.3866
.78653
.04796
Possessed
269
3.3755
.89167
.05437
Importance
269
4.2937
.87630
.05343
Possessed
269
1.9517
.87752
.05350
Importance
269
4.5762
.72711
.04433
Possessed
269
2.8476
.85246
.05198
Importance
269
4.4796
.66674
.04065
Possessed
269
2.3717
1.00154
.06106
Importance
269
4.3271
.78038
.04758
Possessed
269
2.3717
1.16033
.07075
Importance
269
4.4349
.65822
.04013
Possessed
269
1.9703
.99582
.06072
Importance
269
4.1970
.79306
.04835
Possessed
269
2.4647
.73025
.04452
Importance
269
4.0483
.84723
.05166
Possessed
269
1.9740
.79367
.04839
Importance
269
4.5353
.58244
.03551
Possessed
269
2.3829
.86292
.05261
Importance
269
4.3346
.78200
.04768
Possessed
269
1.9405
1.03853
.06332
Importance
269
4.5279
.79420
.04842
Possessed
269
2.5242
.96794
.05902
Importance
269
4.4796
.50051
.03052
Possessed
269
2.4461
.59371
.03620
Importance
269
4.5279
.50015
.03049
Possessed
269
1.9145
.55662
.03394
Importance
269
4.3755
.65528
.03995
Possessed
269
3.4944
.65575
.03998
Importance
269
4.2788
.62917
.03836
Possessed
269
2.5056
.69444
.04234
Summary B
Importance
269
4.3892
.23550
.01436
Possessed
269
2.8250
.24342
.01484
Independent Samples Test
Levene's Test for Equality
of Variances
t-test for Equality of Means
Sig. (2Std. Error
Df
tailed)
Difference
F
Sig.
t
4.169
4.169
2.742
2.742
3.974
3.974
5.304
5.304
2.733
2.733
2.935
2.935
.865
.865
1.355
1.355
.306
.306
.909
.909
3.204
3.204
1.247
1.247
4.949
4.949
1.579
1.579
3.279
3.279
1.036
1.036
5.955
536
529.523
536
527.779
536
535.999
536
522.990
536
466.547
536
469.269
536
464.643
536
532.391
536
533.730
536
470.217
536
497.976
536
516.307
536
521.096
536
529.982
536
536.000
536
530.862
536
.000
.000
.000
.000
.000
.000
.000
.000
.000
.000
.000
.000
.323
.343
.124
.132
.000
.000
.342
.343
.000
.000
.000
.000
.000
.000
.650
.760
.000
.000
.243
.244
.000
.07275
.07275
.07249
.07249
.07561
.07561
.06831
.06831
.07336
.07336
.08526
.08526
.07278
.07278
.06573
.06573
.07078
.07078
.06348
.06348
.07926
.07926
.07634
.07634
.04735
.04735
.04563
.04563
.05652
.05652
.05713
.05713
.02065
5.955
535.416
.000
.02065
BItem1
Equal variances assumed
4.000
.001
BItem2
Equal variances assumed
6.761
.010
BItem3
Equal variances assumed
.556
.456
BItem4
Equal variances assumed
2.786
.096
BItem5
Equal variances assumed
1.339
.000
BItem6
Equal variances assumed
7.110
.000
BItem7
Equal variances assumed
.555
.140
BItem8
Equal variances assumed
1.114
.098
BItem9
Equal variances assumed
8.814
.003
BItem10
Equal variances assumed
.501
.765
BItem11
Equal variances assumed
1.556
.000
BItem12
Equal variances assumed
1.437
.000
BItem13
Equal variances assumed
2.764
.006
BItem14
Equal variances assumed
1.450
.223
BItem15
Equal variances assumed
1.000
.986
BItem16
Equal variances assumed
.850
.109
Summary B Equal variances assumed
.894
.345
Research Question Three:
Group Statistics
Citem1
Citem2
Citem3
Citem4
Citem5
Citem6
Citem7
Citem8
Citem9
Citem10
Citem11
Citem12
Citem13
Summary C
Categories
N
Mean
Std. Deviation
Std. Error Mean
Importance
269
4.3866
.78653
.04796
Possessed
269
1.9294
.73722
.04495
Importance
269
4.3309
.83656
.05101
Possessed
269
1.9405
1.03853
.06332
Importance
269
4.4796
.72053
.04393
Possessed
269
2.5242
.96794
.05902
Importance
269
4.6654
.56611
.03452
Possessed
269
2.4164
.68939
.04203
Importance
269
4.3866
.84153
.05131
Possessed
269
2.7584
.53704
.03274
Importance
269
4.5279
.73057
.04454
Possessed
269
3.6450
.68933
.04203
Importance
269
4.1375
.88922
.05422
Possessed
269
2.7881
.82163
.05010
Importance
269
4.3792
.84492
.05152
Possessed
269
1.9405
1.03853
.06332
Importance
269
4.4833
.66123
.04032
Possessed
269
2.6171
.90513
.05519
Importance
269
4.2937
.82362
.05022
Possessed
269
2.8885
.81189
.04950
Importance
269
4.1796
.66112
.04031
Possessed
269
2.4796
.65012
.05488
Importance
269
4.5204
.66674
.04065
Possessed
269
2.5056
.84915
.05177
Importance
269
4.4721
.79420
.04842
Possessed
269
3.1896
.78929
.04203
Importance
269
4.4264
.33899
.02067
Possessed
269
2.5479
.18953
.01156
Independent Samples Test
Levene's Test for Equality
of Variances
Citem1
Citem2
Citem3
Citem4
Citem5
Citem6
Citem7
Equal variances assumed
Equal variances assumed
Equal variances assumed
Equal variances assumed
Equal variances assumed
Equal variances assumed
Equal variances assumed
F
Sig.
t
1.478
.000
.385
536
.500
.06573
.385
533.769
.300
.06573
2.398
536
.000
.08131
2.398
512.747
.000
.08131
6.578
536
.000
.07357
6.578
495.237
.000
.07357
4.352
536
.000
.05439
4.352
516.461
.000
.05439
6.751
536
.000
.06087
6.751
455.235
.000
.06087
1.581
536
.200
.06124
1.581
534.200
.130
.06124
4.281
536
.000
.07382
4.281
532.685
.000
.07382
2.875
536
.000
.08163
2.875
514.699
.000
.08163
1.306
536
.000
.06834
1.306
490.640
.000
.06834
3.928
536
.000
.07051
3.928
535.890
.000
.07051
1.371
536
.098
.06809
1.371
491.972
.099
.06809
3.609
536
.000
.06583
3.609
507.443
.000
.06583
1.003
536
.120
.06412
1.003
525.590
.121
.06412
4.328
536
.000
.02368
4.328
420.634
.000
.02368
6.825
4.092
3.479
4.927
2.325
3.726
.009
.000
.000
.000
.012
.000
Citem8
Equal variances assumed
6.104
.014
Citem9
Equal variances assumed
.335
.300
Citem10
Equal variances assumed
4.118
.000
Citem11
Equal variances assumed
.668
.213
Citem12
Citem13
Equal variances assumed
Equal variances assumed
Summary C Equal variances assumed
t-test for Equality of Means
Sig. (2Std. Error
Df
tailed)
Difference
6.672
1.491
5.116
.005
.322
.000
Research Question Four:
Group Statistics
DItem1
DItem2
DItem3
DItem4
DItem5
DItem6
DItem7
DItem8
DItem9
DItem10
DItem11
DItem12
Summary D
Categories
N
Mean
Std. Deviation
Std. Error Mean
Importance
269
4.3457
.66030
.04026
Possessed
269
2.4796
.90012
.05488
Importance
269
4.3494
.68336
.04167
Possessed
269
2.5056
.84915
.05177
Importance
269
4.2268
.87068
.05309
Possessed
269
3.1896
.68929
.04203
Importance
269
4.3457
.62548
.03814
Possessed
269
2.3606
.72797
.04438
Importance
269
4.4721
.50015
.03049
Possessed
269
2.8981
.82163
.05010
Importance
269
4.3346
.71207
.04342
Possessed
269
2.5056
.84915
.05177
Importance
269
4.5204
.50051
.03052
Possessed
269
2.6171
.90513
.05519
Importance
269
4.2825
.69789
.04255
Possessed
269
2.1784
1.04638
.06380
Importance
269
4.4721
.50015
.03049
Possessed
269
3.0632
1.13940
.06947
Importance
269
4.5204
.50051
.03052
Possessed
269
2.2045
1.03259
.06296
Importance
269
4.6245
.57002
.03475
Possessed
269
2.4164
.96074
.05858
Importance
269
4.5688
.66349
.04045
Possessed
269
2.4424
.69743
.04252
Importance
269
4.4219
.37219
.02269
Possessed
269
2.5626
.27215
.01659
Hypothesis Testing
Hypothesis One
Sum of Squares
AItem1
AItem2
AItem3
AItem4
AItem5
AItem6
AItem7
AItem8
AItem9
AItem10
AItem11
AItem12
AItem13
AItem14
AItem15
Summary A
Between Groups
df
Mean Square
6.308
2
3.154
Within Groups
361.633
266
1.360
Total
367.941
268
Between Groups
.890
2
.445
Within Groups
314.299
266
1.182
Total
315.190
268
Between Groups
4.462
2
2.231
Within Groups
251.516
266
.946
Total
255.978
268
Between Groups
.585
2
.292
Within Groups
137.653
266
.517
Total
138.238
268
Between Groups
2.357
2
1.179
Within Groups
221.501
266
.833
Total
223.859
268
Between Groups
4.155
2
2.078
Within Groups
246.938
266
.928
Total
251.093
268
Between Groups
.359
2
.180
Within Groups
168.451
266
.633
Total
168.810
268
Between Groups
1.172
2
.586
Within Groups
86.486
266
.325
Total
87.658
268
Between Groups
6.716
2
3.358
Within Groups
328.266
266
1.234
Total
334.981
268
Between Groups
.667
2
.333
Within Groups
199.192
266
.749
Total
199.859
268
Between Groups
1.107
2
.554
Within Groups
136.194
266
.512
Total
137.301
268
Between Groups
4.936
2
2.468
Within Groups
222.216
266
.835
Total
227.152
268
Between Groups
1.269
2
.635
Within Groups
246.946
266
.928
Total
248.216
268
Between Groups
.532
2
.266
Within Groups
192.709
266
.724
Total
193.242
268
Between Groups
.016
2
.008
Within Groups
172.683
266
.649
Total
172.699
268
Between Groups
.032
2
.016
Within Groups
14.820
266
.056
Total
14.852
268
Hypothesis Two
F
Sig.
2.320
.100
.377
.686
2.359
.096
.565
.569
1.416
.245
2.238
.109
.283
.753
1.803
.167
2.721
.068
.445
.641
1.081
.341
2.954
.054
.684
.506
.367
.693
.012
.988
.288
.750
ANOVA
Sum of Squares
BItem1
BItem2
BItem3
BItem4
BItem5
BItem6
BItem7
BItem8
BItem9
BItem10
BItem11
BItem12
BItem13
BItem14
BItem15
BItem16
Summary B
Between Groups
df
Mean Square
3.808
2
1.904
Within Groups
208.080
266
.782
Total
211.888
268
Between Groups
.819
2
.409
Within Groups
212.259
266
.798
Total
213.078
268
Between Groups
.487
2
.244
Within Groups
205.885
266
.774
Total
206.372
268
Between Groups
.317
2
.159
Within Groups
194.433
266
.731
Total
194.751
268
Between Groups
1.284
2
.642
Within Groups
267.541
266
1.006
Total
268.825
268
Between Groups
.765
2
.382
Within Groups
360.061
266
1.354
Total
360.825
268
Between Groups
2.540
2
1.270
Within Groups
263.223
266
.990
Total
265.762
268
Between Groups
3.500
2
1.750
Within Groups
139.414
266
.524
Total
142.914
268
Between Groups
1.856
2
.928
Within Groups
166.962
266
.628
Total
168.818
268
Between Groups
.759
2
.380
Within Groups
198.802
266
.747
Total
199.561
268
Between Groups
3.237
2
1.619
Within Groups
285.811
266
1.074
Total
289.048
268
Between Groups
4.155
2
2.078
Within Groups
246.938
266
.928
Total
251.093
268
Between Groups
.273
2
.137
Within Groups
94.195
266
.354
Total
94.468
268
Between Groups
1.410
2
.705
Within Groups
81.624
266
.307
Total
83.033
268
Between Groups
.564
2
.282
Within Groups
114.678
266
.431
Total
115.242
268
Between Groups
.132
2
.066
Within Groups
129.110
266
.485
Total
129.242
268
Between Groups
.055
2
.028
Within Groups
15.824
266
.059
Total
15.880
268
Hypothesis Three
F
Sig.
2.434
.090
.513
.599
.315
.730
.217
.805
.638
.529
.282
.754
1.283
.279
3.339
.037
1.479
.230
.508
.602
1.506
.224
2.238
.109
.386
.680
2.297
.103
.654
.521
.136
.873
.464
.629
Citem1
Citem2
Citem3
Citem4
Citem5
Citem6
Citem7
Citem8
Citem9
Citem10
Citem11
Citem12
Citem13
Summary C
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
ANOVA
Sum of Squares
df
2.011
2
143.647
266
145.658
268
3.237
2
285.811
266
289.048
268
4.155
2
246.938
266
251.093
268
.125
2
127.243
266
127.368
268
.222
2
77.072
266
77.294
268
.952
2
126.394
266
127.346
268
.953
2
179.969
266
180.922
268
3.237
2
285.811
266
289.048
268
1.166
2
218.396
266
219.561
268
.814
2
175.841
266
176.654
268
.567
2
216.570
266
217.138
268
.532
2
192.709
266
193.242
268
.455
2
126.876
266
127.331
268
.088
2
9.539
266
9.627
268
Mean Square
1.005
.540
F
1.862
Sig.
.157
1.619
1.074
1.506
.224
2.078
.928
2.238
.109
.063
.478
.131
.877
.111
.290
.382
.683
.476
.475
1.001
.369
.477
.677
.705
.495
1.619
1.074
1.506
.224
.583
.821
.710
.493
.407
.661
.615
.541
.284
.814
.348
.706
.266
.724
.367
.693
.227
.477
.477
.621
.044
.036
1.223
.296
Hypothesis Four
DItem1
DItem2
DItem3
DItem4
DItem5
DItem6
DItem7
DItem8
DItem9
DItem10
DItem11
DItem12
Summary D
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
ANOVA
Sum of Squares
.567
216.570
217.138
.532
192.709
193.242
.455
126.876
127.331
1.046
140.976
142.022
.953
179.969
180.922
.532
192.709
193.242
1.166
218.396
219.561
3.277
290.158
293.435
5.120
342.805
347.926
5.111
280.643
285.755
12.338
235.030
247.368
2.195
128.162
130.357
.101
19.749
df
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
19.849
Mean Square
.284
.814
F
.348
Sig.
.706
.266
.724
.367
.693
.227
.477
.477
.621
.523
.530
.987
.374
.477
.677
.705
.495
.266
.724
.367
.693
.583
.821
.710
.493
1.638
1.091
1.502
.225
2.560
1.289
1.987
.139
2.556
1.055
2.422
.091
6.169
.884
6.982
.001
1.097
.482
2.277
.105
.050
.074
.677
.509
268
Hypothesis Five
ANOVA
Sum of Squares
AItem1
Between Groups
4.540
df
Mean Square
2
2.270
F
Sig.
1.662
.192
AItem2
AItem3
AItem4
AItem5
AItem6
AItem7
AItem8
AItem9
AItem10
AItem11
AItem12
AItem13
AItem14
AItem15
Summary A
Within Groups
363.400
266
Total
367.941
268
Between Groups
1.366
1.017
2
.509
Within Groups
314.172
266
1.181
Total
315.190
268
Between Groups
4.648
2
Within Groups
251.329
266
Total
255.978
268
Between Groups
2.324
2.269
2
1.134
135.969
266
.511
Total
138.238
268
1.097
2
.548
Within Groups
222.762
266
.837
Total
223.859
268
Between Groups
25.913
2
12.957
Within Groups
225.180
266
.847
Total
251.093
268
Between Groups
3.326
2
1.663
Within Groups
165.485
266
.622
Total
168.810
268
Between Groups
7.510
2
3.755
Within Groups
80.148
266
.301
Total
87.658
268
Between Groups
1.075
2
.538
Within Groups
333.906
266
1.255
Total
334.981
268
Between Groups
12.471
2
6.236
Within Groups
187.388
266
.704
Total
199.859
268
Between Groups
1.690
2
.845
Within Groups
135.612
266
.510
Total
137.301
268
Between Groups
18.591
2
9.295
Within Groups
208.562
266
.784
Total
227.152
268
Between Groups
19.336
2
9.668
Within Groups
228.880
266
.860
Total
248.216
268
Between Groups
.980
2
.490
Within Groups
192.262
266
.723
Total
193.242
268
Between Groups
1.411
2
.705
Within Groups
171.288
266
.644
Total
172.699
268
Between Groups
.651
2.460
.087
2.219
.111
.655
.520
15.305
.000
2.673
.071
12.462
.000
.428
.652
8.852
.000
1.657
.193
11.855
.000
11.236
.000
.678
.509
1.095
.336
2.960
.054
F
Sig.
5.717
.002
.945
Within Groups
Between Groups
.431
.323
2
.162
Within Groups
14.528
266
.055
Total
14.852
268
Hypothesis Six
ANOVA
Sum of Squares
BItem1
Between Groups
Within Groups
df
Mean Square
4.700
2
1.350
209.188
266
.786
Total
BItem2
BItem3
BItem4
BItem5
BItem6
BItem7
BItem8
BItem9
BItem10
BItem11
BItem12
BItem13
BItem14
BItem15
BItem16
Summary B
Between Groups
211.888
268
2.592
2
1.296
Within Groups
210.486
266
.791
Total
213.078
268
Between Groups
2.366
2
1.183
Within Groups
204.005
266
.767
Total
206.372
268
Between Groups
4.251
2
2.125
Within Groups
190.500
266
.716
Total
194.751
268
Between Groups
1.143
2
.572
Within Groups
267.682
266
1.006
Total
268.825
268
Between Groups
9.306
2
4.653
Within Groups
351.519
266
1.322
Total
360.825
268
Between Groups
3.117
2
1.559
Within Groups
262.645
266
.987
Total
265.762
268
Between Groups
1.784
2
.892
Within Groups
141.130
266
.531
Total
142.914
268
Between Groups
19.649
2
9.825
Within Groups
149.169
266
.561
Total
168.818
268
Between Groups
34.581
2
17.290
Within Groups
164.981
266
.620
Total
199.561
268
Between Groups
2.211
2
1.106
Within Groups
286.837
266
1.078
Total
289.048
268
Between Groups
25.913
2
12.957
Within Groups
225.180
266
.847
Total
251.093
268
Between Groups
2.259
2
1.129
Within Groups
92.210
266
.347
Total
94.468
268
Between Groups
6.957
2
3.479
Within Groups
76.076
266
.286
Total
83.033
268
Between Groups
.996
2
.498
Within Groups
114.245
266
.429
Total
115.242
268
Between Groups
13.428
2
6.714
Within Groups
115.814
266
.435
Total
129.242
268
Between Groups
.301
2
.151
Within Groups
15.578
266
.059
Total
15.880
268
2.638
.196
1.543
.216
7.968
.033
.568
.567
3.521
.031
1.579
.208
1.682
.188
17.519
.000
27.877
.000
5.025
.003
15.305
.000
3.258
.040
12.163
.000
1.160
.315
15.420
.000
3.570
.028
F
Sig.
Hypothesis Seven
ANOVA
Sum of Squares
df
Mean Square
Citem1
Citem2
Citem3
Citem4
Citem5
Citem6
Citem7
Citem8
Citem9
Citem10
Citem11
Citem12
Citem13
Summary C
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
3.241
142.417
145.658
2.211
286.837
289.048
25.913
225.180
251.093
.392
126.976
127.368
6.233
76.061
77.294
1.459
125.886
127.346
6.333
174.589
180.922
2.211
286.837
289.048
40.718
178.843
219.561
19.985
156.669
176.654
30.213
186.925
217.138
4.980
192.262
193.242
4.806
125.525
127.331
.052
9.575
9.627
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
1.620
.535
3.026
.050
1.106
1.078
1.025
.360
12.957
.847
15.305
.000
.196
.477
.411
.664
.617
.286
4.156
.018
.730
.473
1.542
.216
3.167
.656
4.825
.009
1.106
1.078
1.025
.360
20.359
.672
30.281
.000
9.992
.589
16.966
.000
15.106
.703
21.497
.000
.490
.723
5.678
.009
.903
.472
3.914
.010
.026
.036
.728
.484
Hypothesis Eight
ANOVA
Sum of Squares
DItem1
DItem2
DItem3
DItem4
DItem5
DItem6
DItem7
DItem8
DItem9
DItem10
DItem11
DItem12
Summary D
Between Groups
df
Mean Square
6.213
2
5.106
Within Groups
186.925
266
.703
Total
217.138
268
5.980
2
.490
Within Groups
192.262
266
.723
Total
197.242
268
Between Groups
Between Groups
1.806
2
.903
Within Groups
125.525
266
.472
Total
127.331
268
Between Groups
11.973
2
5.986
Within Groups
130.049
266
.489
Total
142.022
268
Between Groups
6.333
2
3.167
Within Groups
174.589
266
.656
Total
180.922
268
Between Groups
.980
2
.490
Within Groups
192.262
266
.723
Total
193.242
268
Between Groups
7.718
2
5.359
Within Groups
178.843
266
.672
Total
219.561
268
Between Groups
4.853
2
2.426
Within Groups
288.582
266
1.085
Total
293.435
268
4.945
2
2.472
Within Groups
342.981
266
1.289
Total
347.926
268
Between Groups
Between Groups
17.045
2
8.522
Within Groups
268.710
266
1.010
Total
285.755
268
Between Groups
12.258
2
6.129
Within Groups
235.110
266
.884
Total
247.368
268
Between Groups
4.229
2
2.114
Within Groups
126.128
266
.474
Total
130.357
268
Between Groups
Within Groups
Total
.190
2
.095
19.659
266
.074
19.849
268
F
Sig.
11.497
.000
5.678
.009
1.914
.150
12.244
.000
4.825
.009
.678
.509
13.281
.000
2.237
.109
3.918
.019
8.436
.000
6.934
.001
4.459
.012
5.285
.008
Hypothesis Nine
ANOVA
Sum of Squares
df
Mean Square
F
Sig.
AItem1
AItem2
AItem3
AItem4
AItem5
AItem6
AItem7
AItem8
AItem9
AItem10
AItem11
AItem12
AItem13
AItem14
AItem15
Summary A
Between Groups
5.350
2
1.675
Within Groups
362.591
266
1.371
Total
367.941
268
Between Groups
4.255
2
2.128
Within Groups
310.935
266
1.169
Total
315.190
268
Between Groups
8.113
2
1.556
Within Groups
247.865
266
.951
Total
255.978
268
Between Groups
.207
2
.103
Within Groups
138.031
266
.519
Total
138.238
268
Between Groups
7.940
2
1.470
Within Groups
215.919
266
.838
Total
223.859
268
Between Groups
4.012
2
1.006
Within Groups
247.081
266
.936
Total
251.093
268
Between Groups
2.127
2
1.063
Within Groups
166.684
266
.627
Total
168.810
268
Between Groups
6.825
2
1.412
Within Groups
180.833
266
.826
Total
187.658
268
Between Groups
.635
2
.318
Within Groups
334.346
266
1.257
Total
334.981
268
Between Groups
8.038
2
2.019
Within Groups
191.821
266
.736
Total
199.859
268
Between Groups
4.753
2
.376
Within Groups
132.548
266
.513
Total
137.301
268
Between Groups
6.061
2
2.531
Within Groups
221.091
266
.850
Total
227.152
268
Between Groups
4.154
2
1.077
Within Groups
244.062
266
.933
Total
248.216
268
Between Groups
.577
2
.289
Within Groups
192.664
266
.724
Total
193.242
268
Between Groups
5.061
2
1.530
Within Groups
167.638
266
.745
Total
172.699
268
Between Groups
.141
2
.071
Within Groups
14.711
266
.055
Total
14.852
268
5.222
.006
3.820
.014
7.637
.001
.199
.819
4.561
.002
3.174
.043
1.697
.185
4.263
.005
.253
.777
5.742
.003
3.733
.041
6.624
.002
3.083
.041
.398
.672
3.822
.045
1.275
.281
Hypothesis Ten
ANOVA
BItem1
BItem2
BItem3
BItem4
BItem5
BItem6
BItem7
BItem8
BItem9
BItem10
BItem11
BItem12
BItem13
BItem14
BItem15
BItem16
Summary B
Sum of Squares
df
8.229
2
.614
Within Groups
207.660
266
.792
Total
211.888
268
Between Groups
Between Groups
Mean Square
7.472
2
1.236
Within Groups
205.606
266
.792
Total
213.078
268
Between Groups
.549
2
.274
Within Groups
205.823
266
.774
Total
206.372
268
Between Groups
14.632
2
1.316
Within Groups
180.119
266
.730
Total
194.751
268
Between Groups
2.927
2
1.463
Within Groups
265.898
266
1.000
Total
268.825
268
Between Groups
7.097
2
2.049
Within Groups
353.728
266
1.341
Total
360.825
268
Between Groups
14.998
2
1.999
Within Groups
250.764
266
.992
Total
265.762
268
Between Groups
5.494
2
1.047
Within Groups
137.420
266
.535
Total
142.914
268
Between Groups
8.686
2
1.143
Within Groups
160.132
266
.632
Total
168.818
268
Between Groups
.612
2
.306
Within Groups
198.950
266
.748
Total
199.561
268
Between Groups
3.450
2
1.725
Within Groups
285.599
266
1.074
Total
289.048
268
Between Groups
15.012
2
1.006
Within Groups
236.081
266
.936
Total
251.093
268
Between Groups
5.348
2
1.274
Within Groups
189.120
266
.950
Total
194.468
268
Between Groups
5.969
2
.984
Within Groups
177.065
266
.609
Total
183.033
268
Between Groups
.481
2
.240
Within Groups
114.761
266
.431
Total
115.242
268
Between Groups
3.301
2
1.651
Within Groups
125.941
266
.473
Total
129.242
268
Between Groups
10.047
2
1.024
Within Groups
105.832
266
.560
Total
115.880
268
Hypothesis Eleven
ANOVA
F
Sig.
5.776
.011
3.561
.012
.355
.702
8.433
.009
1.464
.233
5.528
.010
7.008
.007
3.462
.031
4.543
.022
1.409
.665
2.607
.103
11.074
.000
6.925
.018
3.570
.040
.557
.574
3.486
.032
5.398
.002
Citem1
Citem2
Citem3
Citem4
Citem5
Citem6
Citem7
Citem8
Citem9
Citem10
Citem11
Citem12
Citem13
Summary C
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Hypothesis Twelve
Sum of Squares
6.322
139.336
145.658
8.450
280.599
289.048
5.012
246.081
251.093
.858
126.510
127.368
.135
177.159
177.294
6.578
120.768
127.346
.337
180.585
180.922
13.450
275.599
289.048
8.961
210.600
219.561
1.770
174.884
176.654
15.606
201.532
217.138
.577
192.664
193.242
6.429
120.902
127.331
9.035
110.591
119.627
df
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
Mean Square
1.161
.546
F
4.295
Sig.
.015
1.725
1.074
8.607
.003
1.006
.936
3.174
.043
.429
.476
.902
.407
.067
.290
.233
.793
.789
.473
7.669
.010
.169
.679
.248
.780
1.725
.574
16.607
.000
1.981
.618
7.199
.013
.885
.657
1.346
.262
1.303
.814
9.372
.009
.289
.724
.398
.672
1.715
.673
4.510
.023
1.018
.536
7.492
.012
DItem1
DItem2
DItem3
DItem4
DItem5
DItem6
DItem7
DItem8
DItem9
DItem10
DItem11
DItem12
Summary D
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
ANOVA
Sum of Squares
8.606
208.532
217.138
12.577
180.664
193.242
6.429
120.902
127.331
.969
141.053
142.022
7.337
173.585
180.922
.577
192.664
193.242
8.961
210.600
219.561
8.404
285.031
293.435
15.351
332.575
347.926
6.737
279.018
285.755
1.880
245.488
247.368
4.027
126.330
130.357
7.282
112.568
119.849
df
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
2
266
268
Mean Square
1.303
.814
F
6.372
Sig.
.010
1.289
.724
10.398
.002
1.715
.873
3.510
.033
.484
.530
.914
.402
1.169
.679
4.248
.030
.289
.724
.398
.672
1.981
.818
9.199
.003
2.202
1.087
3.226
.034
2.675
1.288
12.077
.007
3.369
1.049
3.211
.042
.940
.923
1.019
.362
2.014
.475
4.240
.015
1.141
.874
6.914
.010
Hypothesis Thirteen
Group Statistics
Location
DItem1
DItem2
DItem3
DItem4
DItem5
DItem6
DItem7
DItem8
DItem9
DItem10
DItem11
DItem12
Summary D
N
Mean
Std. Deviation
Std. Error Mean
Urban
181
2.4751
.89795
.06674
Rural
88
2.4886
.90965
.09697
Urban
181
2.5359
.81314
.06044
Rural
88
2.4432
.92049
.09812
Urban
181
3.1713
.69798
.05188
Rural
88
3.2273
.67342
.07179
Urban
181
2.4144
.70680
.05254
Rural
88
2.2500
.76188
.08122
Urban
181
2.7956
.81458
.06055
Rural
88
2.7727
.84046
.08959
Urban
181
2.5359
.81314
.06044
Rural
88
2.4432
.92049
.09812
Urban
181
2.6133
.89731
.06670
Rural
88
2.6250
.92615
.09873
Urban
181
2.1989
1.06677
.07929
Rural
88
2.1364
1.00781
.10743
Urban
181
3.0387
1.16125
.08631
Rural
88
3.1136
1.09787
.11703
Urban
181
2.2376
1.05088
.07811
Rural
88
2.1364
.99634
.10621
Urban
181
2.4254
.98951
.07355
Rural
88
2.3977
.90388
.09635
Urban
181
2.4199
.70745
.05258
Rural
88
2.4886
.67797
.07227
Urban
181
2.5718
.27014
.02008
Rural
88
2.5436
.27681
.02951
Independent Samples Test
Levine’s Test for Equality
of Variances
DItem1
DItem2
DItem3
DItem4
DItem5
DItem6
Equal variances assumed
Equal variances assumed
Equal variances assumed
Equal variances assumed
Equal variances assumed
Equal variances assumed
F
.012
Sig.
.914
3.346
.068
.006
.940
.515
.474
.250
.617
3.346
.068
DItem7
Equal variances assumed
.220
.640
DItem8
Equal variances assumed
.673
.413
DItem9
Equal variances assumed
.773
.380
DItem10
Equal variances assumed
1.302
.255
DItem11
Equal variances assumed
1.786
.183
DItem12
Equal variances assumed
.059
.809
Summary D Equal variances assumed
.585
.445
xii
t
.115
t-test for Equality of Means
Sig. (2Std. Error
df
tailed)
Difference
267
.908
.11719
.115
170.470
.909
.11772
.840
267
.402
.11041
.805
154.771
.422
.11525
-.624
267
.533
.08968
-.632
178.125
.528
.08857
1.744
267
.082
.09425
1.699
161.383
.091
.09673
.214
267
.831
.10697
.211
167.706
.833
.10813
.840
267
.402
.11041
.805
154.771
.422
.11525
.100
267
.921
.11784
.099
167.652
.922
.11915
.459
267
.646
.13618
.468
181.561
.640
.13353
-.506
267
.614
.14828
-.515
181.439
.607
.14542
.754
267
.452
.13430
.768
180.976
.444
.13184
.221
267
.825
.12508
.228
187.202
.820
.12122
.758
267
.449
.09071
.769
179.221
.443
.08938
.799
267
.425
.03539
.792
168.736
.430
.03569