For correspondence:-
Received: 09 April 2018 Accepted: 21 May 2018 Published: 30 June 2018
Citation: Income Statement Preparation by Small and Medium. Account Tax Rev 2003; 2(2):43-56 doi:
© 2003 The authors.
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Abstract
Small and medium enterprises (SMEs) are of significant importance to states and nations, especially in the areas of employment creation and economic development. The Edo State government in Nigeria has made several efforts at encouraging and supporting the establishment and growth of small and medium enterprises in the State. Despite these efforts, the SMEssector in the state seem not to have registered the desired level of performance and growth. One of the problems associated with this slow pace of development and growth of SMEs in the state is the seeming inability of the SMEs to manage their businesses through the use of accounting records. This study therefore investigates the extent to which SMEs in Edo State keep accounting records and prepare income statement in the course of their businesses. The population of the study was taken as all small and medium scale enterprises in the selected four local government areas from where a sample size of 121 businesses belonging to different product/service groups that were purposively selected for the survey, using a structured questionnaire, containing open-ended, bipolar and 5-point Likert type questions as a research instrument. The findings reveal that a majority of SMEs in the state do not fully keep accounting records, prepare income statement or employ qualified accountants to manage their financial records. It is therefore recommended that government, banks, microfinance institutions and even universities should set up enlightenment campaigns, training programmes and seminars on the need for all SMEs to keep daily record of their business transactions and prepare an annual or regular income statements as a means of controlling and enhancing the performance of their businesses and ensuring sustainable profit and growth.
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