BASIC FIENTREPRENEURSHISECONDARY SCHOOL STUDENTS
FACULTY OF VOC
DEPARTMENT OF
Ebere Omeje
OGUORA, EUCHARIA UKAMAKAPG/M.Ed/13/65251
BASIC FINANCIAL ACCOUNTING SKILS REQUIRED FOR ENTREPRENEURSHIP DEVELOPMENT BY SENIOR SECONDARY SCHOOL STUDENTS IN ANAMBRA STATE
FACULTY OF VOCATIONAL TECHNICAL EDUCATION
DEPARTMENT OF BUSINESS EDUCATION
Ebere Omeje Digitally Signed by: Content manager’s Name
DN : CN = Webmaster’s name
O= University of Nigeria, Nsukka
OU = Innovation Centre
OGUORA, EUCHARIA UKAMAKA
REQUIRED FOR DEVELOPMENT BY SENIOR
IN ANAMBRA STATE
ATIONAL TECHNICAL EDUCATION
Digitally Signed by: Content manager’s Name
DN : CN = Webmaster’s name
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BASIC FINANCIAL ACCOUNTING SKILLS REQUIRED FOR ENTREPRENEURSHIPDEVELOPMENT
BY SENIOR SECONDARY SCHOOL STUDENTS IN ANAMBRA STATE
BY
OGUORA, EUCHARIA UKAMAKA PG/M.Ed/13/65251
DEPARTMENT OF BUSINESS EDUCATION FACULTY OF VOCATIONAL TECHNICAL EDUCATION
UNIVERSITY OF NIGERIA, NSUKKA
JANUARY, 2016
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TITLE PAGE
BASIC FINANCIAL ACCOUNTING SKILLS REQUIRED FOR ENTREPRENEURSHIP DEVELOPMENT BY SENIOR SECONDARY SCHOOL
STUDENTS IN ANAMBRA STATE
By
OGUORA EUCHARIA UKAMAKA PG/M.Ed/13/65251
A RESEARCH PROJECT PRESENTED TO THE DEPARTMENT OF BUSINESS EDUCATION, FACULTY OF VOCATIONAL TEACHER EDUCATION, UNIVERSITY
OF NIGERIA NSUKKA, IN PARTIAL FULFILMENT FOR THE AWARD OF MASTERS DEGREE IM BUSINESS EDUCATION
SUPERVISOR: PROF. E. E. AGOMUO
JANUARY, 2016.
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APPROVAL PAGE
This project has been approved for the Department of Business Education, University of
Nigeria Nsukka.
BY
------------------------ ------------------------ Prof. E. E. Agomuo Internal Examiner Supervisor ------------------------ ------------------------ External Examiner Prof. C. A. Obi Head of Department
------------------------ Prof. C. A. Igbo Dean of Faculty
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CERTIFICATION
I,OguoraEuchariaUkamaka a postgraduate student in the Department of Business
Education with Registration No PG/M.Ed/13/65251 has satisfactorily completed the requirement
for research work for Master’s Degree in Business Education. This 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.
---------------------- ----------------------- Oguora, E. U. Prof. E. E. Agomuo Student Supervisor
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DEDICATION
This work is dedicated to Almighty God, the giver of life, knowledge and wisdom.
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ACKNOWLEDGEMENTS
May all praises and adorations be unto the Almighty God, the giver of life, knowledge
and wisdom for his mercies and grace upon my life and the ability to complete this programme. I
am most grateful to my supervisor Prof. E. E. Agomuo for his tolerance, directions, guidance,
suggestions and constructive criticisms in going through every stage of this study.
Great thanks are due to all the lecturers in Business Education department in particular and
in Vocational Teacher Education in general for their supports. Encouragements, valuable
suggestions, corrections, and advice in the making of this project work. I gratefully acknowledge
the special contributions of Dr E. C. Ugwuoke, Dr J. k. Edeh (ACA) and MrsUjufor their
contributions as validators of the instrument used for collecting data in this work. I am also
indebted to DrTochukwuEjiofor and Dr E. A. Etonyeaku for their contributions as design and
content readers respectively and Prof. C. A. Igbo for their constructive criticisms and
suggestions. I am also grateful to Dr. C.J. Olelewe for his time, corrections and constructive
criticism.
I am most grateful to my husband Mr Daniel Ikeh, my children, Chidera, Chinonso,
Kosisochukwu and Amarachukwu for their endurance and tolerance during this programme. I am
also grateful to my mother Veronica Oguora, BrotherMrUcheOkafor, SistersDrNkechi, Joy,
Oluchi,Anthonia, Chika, Chinenye and Obiageli for their encouragements.
I also extend my sincere gratitude to my mentors Bro. Monday Anyaora and Rev. Emma
Anyaogu for their prayers and encouragements during this programme and my friends and
colleagues IkechukwuOdogwu,Ogwuma Dike,Mr Luke, Mr Samuel, EbukaNwammadu for their
assistance to see this project work through.
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Finally, I alsoappreciate the Statistic Department of AnambraMinistry of Education,
accounting lecturers and teachers in public higher institutions and public secondary schools in
Anambra state for their cooperation in responding to the questionnaire and for providing the
population data used for this work, may Almighty God bless you all in Jesus Name Amen.
.
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TABLE OF CONTENTS
Title Page i Approval Page ii Certification iii Dedication iv Acknowledgement v Table of Contents vi List of Tables ix List of Figures xi Abstract xii CHAPTER ONE: INTRODUCTION
Background of the Study 1 Statement of the Problem 7 Purpose of the Study 8 Significance of the Study 9 Research Questions 11 Hypotheses 12 Delimitation of the Study 13
CHAPTER TWO: LITERATURE REVIEW Conceptual framework 14 Over view of Entrepreneurship Development 15 Skill 19 Financial Accounting 20 Financial Accounting Skills 23 Prime BookSkills 23 Cash BookSkills 29 Bank Reconciliation Skills 35 Ledger Classification 38 Trading, Profit and Loss Account Skills 42 The Balance Sheet Skills 45 Senior Secondary Schools/Accounting Teachers 48 Theoretical Frame Work 52 Need Achievement Theory 52 Risk Taking Theory 53 Related Empirical Studies 53 Summary of Literature Reviewed 56
CHAPTER THREE: METHODOLOGY
Design of the Study 57 Area of theStudy 57 Population for the Study 57 Sample and Sampling Techniques 58 Instrument for Data Collection 58 Validation of the Instrument 59 Reliability of the Instrument 59
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Method of Data Collection 60 Method of Data Analysis 60 CHAPTER FOUR: PRESENTATION AND ANALYSIS OF DATA 61 Findings of the Study 76 Discussion of the Findings 78 CHAPTER FIVE: SUMMARY CONCLUSION AND RECOMMENDATION Re-Statement of the Problem 85 Summary of Procedure Used 86 Summary of Findings 87 Conclusion 88 Implications of the Study 89 Recommendations 90 Limitation of the Study 90 Suggestions for Further Studies 91 References 92 Appendices Appendix A: Population Distribution for the Study Appendix B: Final Draft of the Questionnaire Appendix C: Senior Secondary Education Curriculum Appendix D: The Reliability Test Analysis
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LIST OF TABLES
Table 1: Mean and standard deviation of responses of accounting teachers and lecturers perception of the prime book entry skills required for entrepreneurship development by senior secondary school students of Anambra State.61
Table 2: Mean and standard deviation of responses of accounting teachers and lecturers perception on the cash book entry skills required for entrepreneurship development by senior secondary school students ofAnambra State. 63 Table 3: Mean and standard deviation of responses of accounting teachers and lecturers perception on the bank reconciliation statement skills required for entrepreneurship development by senior secondary school students of Anambra State. 64 Table 4: Mean and standard deviation of responses of accounting teachers and lecturers perception of the ledger skills required for entrepreneurship development by senior secondary school students of Anambra State. 65 Table 5: Mean and standard deviation of responses of accounting teachers and lecturers perception on the trading, profit and loss account skills required for entrepreneurship development by senior secondary school students of Anambra State. 66
Table 6: Mean and standard deviation of responses of accounting teachers and lecturers perception on the balance sheet skills required for entrepreneurship development by senior secondary school students ofAnambra State. 67
Table 7: t-test analysis of the responses of the accounting lecturers and accounting teachers’ on their perception on the prime book entry skills required for entrepreneurship development by senior secondary school (111) students in Anambra State. 69 Table 8: t-test analysis of the responses of the accounting lecturers and accounting teachers’ on their perception on the cash book entry skills required for entrepreneurship development by senior secondary school (111) students in Anambra State. 70 Table 9: t-test analysis of the responses of the accounting lecturers and accounting teachers’ on their perception on the bank reconciliation skills required for entrepreneurship development by senior secondaryschool 3 students in Anambra State. 71
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Table 10: t-test analysis of the responses of the accounting lecturers and accounting teachers’ on their perception on the ledger skills required for entrepreneurship development by senior secondary school(111) students in Anambra State. 73 Table 11: t-test analysis of the responses of the accounting lecturers and accounting teachers’ on their perception on the trading, profit and loss account skills required for entrepreneurship development by senior secondary school (111) studentsin Anambra State. 74 Table 12: t-test analysis of the responses of the accounting lecturers and accounting teachers on their perception on the balance sheet skills required for entrepreneurship development by senior secondary school (111) students in Anambra State. 75
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LIST OF FIGURES
Figure 1: Format of Sales Day Book 25
Figure 2: Format of Purchases Day Book 26
Figure 3: Format of Return Inward Day Book 27
Figure 4: Format of Return Outward Day Book 28
Figure 5: Format of Journal Proper 29
Figure 6: Format of a Ledger 30
Figure 7: Format of a Single Column Cash Book 31
Figure 8: Format of Two Column Cash Book 32
Figure 9: Format of Three Column Cash Book 33
Figure 10: Format of a Petty Cash Book 34
Figure 11: Adjusted Cash Book Items 36
Figure 12: Format of Bank Reconciliation Statement 37
Figure 13: Format of Account Classification 39
Figure 14: Format of a Trial Balance 41
Figure 15: Schematic Diagram of Basic Financial Accounting Skills Required for Entrepreneurship Development by Senior Secondary Students 51
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ABSTRACT
The title of this study was designed to determine the basic financial accounting skills required for entrepreneurship development by senior secondary school students in Anambra state. The study adopted descriptive research design which involved financial accounting lecturers in public higher institutions and accounting teachers in government owned secondary schools in Anambra state. The population of the study was 207 financial accounting lecturers and teachers in Anambra state. Six research questions and six null hypotheses were formulated and tested at 0.05 level of significance to guide the study and at 194 degree of freedom. The instrument used for data collection was structured questionnaire item statement. To ensure that the instrument measures what it suppose intended to measure, the questionnaire item statement were subjected to face validation by three experts. Cronbach Alpha was used to determine the internal consistence of the instrument items. The average reliability co-efficient computed for the instrument was found to be 0.880. Mean was used to answer the research questions while t- test was used to test the hypothesis. The study found out that prime books entry skills were very much required for entrepreneurship development by senior secondary school leavers in Anambra state. The study also found that cash book entry skills were also very much required for entrepreneurship development by senior secondary school leavers in the state of study. The study also discovered that bank reconciliation skills were very much required for entrepreneurship development by senior secondary leavers in Anambra state. Ledger accounting skills were also found to be very much required for entrepreneurship development by senior secondary school leavers in the state of study. The study also found that trading, profit and loss account and balance sheet skills were very much required for entrepreneurship development by senior secondary school 3 students in Anambra state. The result of the study also showed that there was no significance difference in the mean ratings of financial accounting lecturers and teachers on the prime book entry skills required for entrepreneurship development. The result of the study also showed that there was no significant difference in the mean ratings of accounting lecturers and teachers on the cash book entry skills, bank reconciliation skills, ledger skills, trading, profit and loss and balance sheet skill required for entrepreneurship development by senior secondary school 3 students in Anambra State. As a result of these, it was recommended that financial accounting be made a compulsory subject in Senior Secondary Schools in Nigeria considering the need to reduce unemployment and poverty level among the Nigerian Youths.
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INTRODUCTION
CHAPTER ONE
Background of the Study
Entrepreneurship has been observed to be featuring and will continue to feature as a
major theme in both national and international conferences. This is because of its immense
contributions in the economic development of both developing and developed nations. It is an
ability of an individual to identify and extract economic activities within his environment which
others are unable to identify. It deals with the identification and extraction of new economic
ideas and strategies which are not yet been tapped by any one.Akanbi (2010) defined
entrepreneurship as the process of creating something different in valueby devoting the necessary
time and effort, assuming the accompanying financial, psychological and social risks and
receiving the resulting rewards of monetary and personal satisfaction. Entrepreneurship is the
ability to turn ideas into action by an individual. Agomuo (2002) viewed entrepreneurship as a
process of bringing together creative and innovative ideas, combining them with management
and organization skills in order to combine people, money and resources to meet an identified
need and thereby create wealth.A person who engages in an entrepreneurship process is an
entrepreneur.
An entrepreneur is therefore an individual who combines both natural and human
resources in order to create wealth.Delbridge in Muhammed, Malik, Arslam, Salman and Abid
(2013) identified an entrepreneur as a person who runs the business and bears the risk for profit
and loss. Entrepreneurs are generally classified according to types of business, technology use,
motivation, growth and entrepreneurial stages of development. For the purpose of this study,
business entrepreneurs will be considered. Entrepreneurs according to types of business can
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bebusiness entrepreneurs who conceive an idea for a new product or services and then create a
business to materialize their idea into reality, or trading entrepreneur who tries to identify
potential marketers, stimulates demand for his product line and creates desire and interest among
buyers to go for his products. It can also be industrial entrepreneur who identifies the potential
needs of customers and tailors a product or services to meet the marketing needs. Whichever
type of entrepreneurship that exists, it can be learnt and developed.Williams in Onu (2013)
asserted that entrepreneurship is a learnable process that can be taught, nurtured, supported and
enhanced through various types of education and training.
Entrepreneurial development may be conceived as a programme of activities to enhance
the knowledge, skills and abilities of individuals and groups to assume the role of entrepreneur as
well as efforts to remove all forms of barriers in the path of entrepreneur (Okiti- Okagbare,
2008). In the words of Shane and Venkataraman in Akhnokalome (2013), the thrust of
entrepreneurship development entails identifying the sources of opportunities, the process of
discovery, evaluation, and exploitation of opportunities; and the set of individuals who discover,
evaluate and exploit them. Most entrepreneurship businesses in Nigeria operate on the level of
small and medium scale basis due to the amount of capital involved in the business and the
number of personnel that can be accommodated (Aruwa, in Ezeani, Ifeonyemetalu and
Ezemoyihe,2012). Akpotowoh(2005) stated that most people currently engage into
entrepreneurship without acquiring much skills and competencies that will enable them to
effectively operate the business. As a result of this attitude, high rate of failure is experienced
instead of success.Ezeani, etal (2012) noted that the failure is not always because entrepreneurs
do not have the necessary capital to stay afloat, but because they some timeslack the pre-requisite
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skills required to grow from small position to bigger one and also remain in the business. One of
the major skills required for growth of entrepreneurial businessesis financial accounting skill.
Financial accounting is a branch of accounting that gathers and summarizes financial data
for the organizational management decisions and for the outsiders who are interested in the
affairs of the organization. Financial accounting is a concept and technique by which financial
data are processed into meaningful information for reporting, planning, controlling and decision-
making purposes. Ezeani (2008) defined financial accounting as the process of expressing the
economic activities of everyday life in money terms.The process of recording, classifying,
selecting, measuring, interpreting and communicating financial data of any business to enable
users make decision in called accounting (Longe and Kazeem, 2012). Accounting is one of the
most effective decision making tools of the management. Obi (2011) asserted that managers of
businesses should possess skills in accounting for marketing and personnel management. Small
business operators (entrepreneurs) should be particularly versed in accounting skills especially
financial accounting skills.
Financial accounting is a branch of accounting that gathers and summarizes financial data
for the preparation of financial reports for the organizational management and outsiders who are
interested in the affairs of the organization. Financial accounting skills therefore can be said to be
those skills that enables an individual to effectively and efficiently enter, retrieve and analyze
financial data of a business concern. The basic financial accounting skills required by business
operators (entrepreneurs) are prime book entry skills, cash book entry skills, bank reconciliation
skills, ledger skills, trading, profit and loss account skills and the balance sheet skills (FRN,
2011).
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The prime books of accounts are also known as subsidiary books or books of original
entry. According to Igben (2009), the subsidiary books are books into which transactions are
recorded on a daily basis from the source documents and from which transfers are made at
suitable periodic intervals to the relevant accounts in the ledger. The prime books help to reduce
clustering of too much items in the ledger. These books includes: sales day books, used in
recording credits sales, purchases daybook used in recording credit purchases, returns inward
daybook, returns outward daybook and cashbook used in recording receipt and payment of
money.
The cash book is a financial book used in recording all cash transactions. These include
both cash and bank transactions. The cash book helps to monitor cash inflow and outflow in a
business. Cash is the basic unit needed to keep businesses running on a continuous basis; it is
also the ultimate output expected to be realized by selling the products of a firm. Moreover, by
introducing a fair system for recording business cash transactions, the owner is able to exercise
control on him regarding withdrawals of funds for his personal use which would otherwise have
been available for business expansion (Moorthi, 2001).Most cash received are paid into the bank
and some cash payments made through the bank also.
The cash book has both the cash and bank columns. Discrepancies often arise between
the cash book balance and the balance shown in the bank statement. These discrepancies are
often caused by timing of transactions and lack of communication of some transactions
performed by the bank on behalf of its customers,hence the need to reconcile the both books.
Bank reconciliation statement is therefore is prepared to bring to agreement the customers cash
book and the statement issued by the bank. Longe and Kazeem (2012) defined bank
reconciliation statement as a statement that is prepared to reconcile the disagreement between the
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cash book balance and the balance in the bank statement. According to the authors,reconciliation
is necessary in order for the cash book and the bank balance to be the same.
Furthermore, owners of business organizations, small or large should be able to record its
transaction in the ledger. There are many kinds of ledger accounts. An account is a page in the
ledger divided into two halves with vertical and horizontal line(Igben, 2009). Accounts are
classified into two major groups namely: personal account and impersonal account. Personal
accounts are account for the names of individuals, firms and business enterprises who are either
creditors or debtors to a business organizationwhile impersonal accounts are accounts for
properties, items of expenditure and income (Longe and Kazeem, 2012). Personal accountcovers
the receivables and payables from debtors and creditors respectively, (Igben, 2009). The postings
in the ledger accounts can be tested for arithmetical accuracy and conforming to the principle of
double entry. The schedule or list that shows the debit and credit balance extracted from the
ledger to show the arithmetical accuracy of the ledger is the trial balance (Longe&Kazeen,
2012). It is a technique that ensures that debit and credit balances as displayed in the ledger
account are correct. The trial balance helps to test the accuracy of the double entry system used
in entry the ledger accounts.
Similarly, trading profit and loss account skills are important skills required for
entrepreneurship development. The trading account is a revenue account prepared to show the
gross profit or gross loss while the profit and loss account it is prepared to show net profit or net
loss at a particular period of time (Igben, 2009). The profit obtained in profit and loss account
is usually transferred to the balance sheet to increase the capital. The balance sheet is a statement
that shows the summary of assets and liabilities in well-arranged form (Longe and Kazzeem,
2012). According to the authors, the balance sheet isnot an account but a statement
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InAnambra state, majority of the citizens engages in one form of entrepreneurship
business or the other, while some of the entrepreneurs are not educated those that have some
education may not have the necessary skills especially financial accounting skills required for
successful entrepreneurship. They often invest on goods that are not fast moving in the market,
dip hands into the business capital anyhow to solve some personal problems and cannot
determine whether the business is making profit or loss. Some of them also forgot who owes
them, the amount being owed and even what was sold due to lack of pre-requisite accounting
skills which often leads to early collapse of their businesses.
Since some of the small scale business men in Anambra state do not further their
education beyond senior secondary school level, those school leavers who often attempt to
establish their own businesses most often get into quick liquidation and bankruptcy because they
lack basic financial accounting skills and so the need to teach them the pre-requisite financial
accounting skills for future career when they still in school.
The importance of financial accounting in the growth of any business cannot be over
emphasized for it helps to foster growth in businesses by providing financial information needed
for easy accessibility to bank loans and overdraft. It also helps in decision making. Ofonagoro
(1993) while commenting on the importance of financial accounting skills in the life of any
business asserted that the high incidence of failure among small scale enterprises in Nigeria may
be attributed to the poor accounting system used by these enterprises. Since the main aim of
every business is to make profit, and to be able to determine the amount of profit made at a
particular period, financial records has to be kept using financial accounting skills.
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Statement of the Problems
Nigerian government (both past and present) had made several efforts to support
entrepreneurship development and to reduce the level of poverty and unemployment among
Nigerian youth. These effortsincludes: National Poverty Eradication Programme (NAPEP), small
and medium enterprises development agency of Nigerian (SMEDAN) among others. Despite
these efforts, most of the youth especially secondary school leavers in Anambra state who could
not further their education still roam the streets without jobs. They continue to besiege ministries
and government offices in search of jobs that are either veryfew in supplies or even none existing
and even engage in social crimes and political violence.
Similarly, the objective of book-keeping and accounting as stated in 2007 senior
secondary education curriculum in business studies vol.4 stressed among other objectives that
financial accounting is to provide fundamental instruction to help students assume their
economic role as consumers, workers and citizens and also provide skills for personal use in the
future. These objectives as stated have not been met yet. This is evidenced in the inability of
senior secondary school graduates in Anambra state who are hired to work as either sales boys /
girls or account clerks to remain in jobs and retarded growths and liquidation experienced by
most small and medium scale businesses in the state. The graduates are either fired so soon by
their employers or self-frustrated out of the job due to lack of basic financial accounting skills.
Secondly, the National policy on education stated that one of the objectives of senior secondary
education is to provide entrepreneurs with technical and vocational job specific skills for self-
reliance (FRN, 2013). Similarly, the senior secondary school curriculum in business studies
stated that one of the objectives of book-keeping and accounting is to provide fundamental
instructions to help students assume their economic roles as consumers, workers and citizens and
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to provide skills for future use (FRN, 2007). All these objectives have not been realized
evidenced in the increasing number of unemployed secondary school leavers in Anambra state.
Anambra state is one of the major commercial cities in Nigeria inhabiting the largest
market in West Africa. A focus group discussion had with some small scale business owners
(entrepreneurs) in Anambra state by the researcher revealed that most of the senior secondary
school students in Anambra state do not offer financial accounting as their subject choice and
some that do, does not acquire the financial skills and when the students leaves school and
establishes any business, the business either liquidates soon after establishment or remains
retarded in growth due to lack of financial accounting skills. Some of these secondary school
leavers who engage themselves with the job of account clerk are either fired soon by their
employers or self-frustrated out due to their inability to apply financial accounting skills to their
job.
It is on this basis that this study tends to determine the basic financial skills that are
required for entrepreneurship development by senior secondary school students in Anambra
state. Therefore, the problem of this study is the none acquisition of basic financial accounting
skills by senior secondary school leavers in Anambra state.
Purpose of the Study
The major purpose of the study is to determine the basic financial accounting skills
required for entrepreneurship development by senior secondary school 3students inAnambra
state. Specifically, the study seeks to determine the:
1. prime book entry skills required for entrepreneurship development by senior secondary
school 3 students inAnambra state.
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2. cash book entry skills required for entrepreneurshipdevelopment by senior secondary
school 3 students inAnambra state.
3. bank reconciliation skills required for entrepreneurshipdevelopment by senior secondary
school 3 students inAnambra state.
4. ledger skills required for entrepreneurshipdevelopment by senior secondary school
3students inAnambra state.
5. trading, profit and loss account skills required for entrepreneurship development by
senior secondary school 3 students inAnambra state.
6. balance sheet skills required for entrepreneurship development by senior secondary
school 3 students inAnambra state.
Significance of the Study
The result of this study will be beneficial to senior secondary school 3 students, financial
accounting teachers, curriculum planners, education authorities, existing and potential
entrepreneurs, parents, researchers and Nigerian government in general.
The findings of this study when included in the curriculum and taught will expose the
students to the basic financial accounting skills that will enable them to establish, manage and
grow their own businesses. It will also encourage them to search for business opportunities
around them and exploit them. It will also expose them to possible causes of business failure and
enable them to make adjustments on their own businesses.
Financial accounting teachers will also benefit from the findings of the study in the sense
that it will expose the teachers to the basic financial skills that are most profitable to thestudents.
The teachers will therefore concentrate on those skills while teaching to make sure that those
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skills are properly inculcated into the students for better entrepreneurship development when
made public through seminars and conferences.
Curriculum planners and education authorities will also benefit from the findings of this
study when made known to the public throughseminars. To the curriculum planners, the study
will enable themrealize the basic financial accounting skills that are most necessarily required by
senior secondary school students for the planner to make sure they are included in the curriculum
during planning and to bring the skills out in the performance objective and content columns of
the curriculum while planning.
To the education authorities, the findingsof this study when made available through
seminars and conferences will assist them to ensure quality control on the determined skills, and
to lay emphasis on them during inspection and supervision to make sure that the teachers of
financial accounting pay more attention to these skilled areas during teaching and in so doing,
the stated objective of financial accounting which includes among other things to provide book-
keeping and accounting skills for personal use in the future will be realized.
The findings on the prime book skills, cash book skills, bank reconciliation skill, ledger
skills, trading, profit and loss account skills and the balance sheet skills when made public during
seminars will enable existing entrepreneurs to understand the reasons behind their businesses
retarded growths and development and enable the entrepreneurs device means of reviving their
businesses. These acquired financial accounting skills will also enable the potential entrepreneurs
to establish, manage, grow and maintain small business of their own. It will also make them to be
aware of the causes of business failure and help them to guard against them before establishing
their own businesses.
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Parents who retire from their jobs and have in mind to startup businesses of their own
will also benefit from the findings of this study when published. It will also equip the parents
with the basic financial record keeping and skills that will assist their businesses grow faster.
And to the researchers, the finding of this study will expose to them the problem areas that need
to be worked on and also serve as reference material to them.
Finally, the findings on prime books, cash book, ability to bank reconciliation statement,
trading, profit and or loss account and balance sheet will be beneficial to the government in
general by the time entrepreneurs gets the outcome of this study through seminars and the
resultant effect of its application to their businesses. This is because, the government will be
encouraged to allocate more fund toward entrepreneurship development in the country seeing
that the sponsored entrepreneurs are able to grow and manage their businesses well. The
government will also benefit from the findings of this study because as entrepreneurship
develops, the production level will increase which will increase the Gross Domestic Product
(GDP) which will inturn increase the economic growth and development of the country and
reduce unemployment rate and poverty level among the citizens.
Research Questions
The following research questions will guide the study;
1. What are the prime book entry skills required for entrepreneurship development by senior
secondary school leavers inAnambra state?
2. What are the cash book entry skills required for entrepreneurship development by senior
secondary school leavers inAnambra state?
3. What are the bank reconciliation skills required for entrepreneurship development by
senior secondary school leavers inAnambra state?
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4. What are the ledger skills required for entrepreneurship development by senior secondary
school leavers inAnambra state?
5. What are the trading, profit and loss account skills required for
entrepreneurshipdevelopment by senior secondary school leavers in Anambra state?
6. What are the balance sheet skills required for entrepreneurshipdevelopment by senior
secondary school leavers inAnambra state?
Hypothesis
Ho1: There is no significant difference in the mean ratings of accounting lecturers and
accounting teachers on the prime book entry skills required for entrepreneurship
development by senior secondary school 3 students inAnambra state.
Ho2: There is no significant difference in the mean ratings of accounting lecturers and
accounting teachers on the cash book entry skills required for entrepreneurship
development by senior secondary school 3 students inAnambra state.
Ho3: There is no significant difference in the mean ratings of accounting lecturers and
accounting teachers on the bank reconciliation skills required for entrepreneurship
development by senior secondary school 3 students in Anambra state.
Ho4: There is no significant difference in the mean ratings of accounting lecturers and
accounting teachers on the ledger skills required for entrepreneurship development by
senior secondary school 3 students inAnambra state.
Ho5: There is no significant difference in the mean ratings of accounting lecturers and
accounting teachers on the trading, profit and loss account skills required for
entrepreneurship development by senior secondary school 3 students inAnambra state.
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Ho6: There is no significant difference in the mean ratings of accounting lecturers and
accounting teachers on the balance sheet skills required for entrepreneurshipdevelopment
by senior secondary school 3 students inAnambra state.
Delimitation of the Study
This study is delimited to financial accounting skills required for entrepreneurship
development by senior secondary school III (SSS3) students inAnambra state. Specifically, the
study will cover the prime book, cash book, bank reconciliation, ledger, trading, profit and loss
account and balance sheet skills required for basic entrepreneurship development by senior
secondary school III students inAnambra state.The opinions ofaccounting lecturers in higher
institutions and accounting teachers in senior secondary schools in Anambra state will be sought
to determine the objective of this study.
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CHAPTER TWO
LITERATURE REVIEW
This chapter presents the review of related literature to this study
Conceptual Framework
• Overview of Entrepreneurship Development
• Skills
• Financial Accounting
• Financial Accounting skills
• Prime/Subsidiary Book
• Cash Book
• Bank Reconciliation Statements
• Ledger Account
• Trading,Profit and Loss Account
• Balance Sheet
Senior Secondary School Students/Teachers
Theoretical Frame Work
• Need Achievement Theory
• Risk Taking Theory
Related Empirical Studies
Summary of Literature Reviewed
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Over view of Entrepreneurship Development
Socio-economic development has become the major issue in the developing countries
like Nigeria. These countries are endowed with so many natural resources but lack the skills and
abilities to exploit them. Entrepreneurship has been globally accepted to be critical to economic
growth and development in an emerging economy such as ours. The word “entrepreneurship” is
derived from the French verb “entrepredre”, which means “to undertake” (Jannings in Onu, some
new business ideas which others were not able to identify. Supporting this view Hisrich, Peter
and Shephard in Idogho and Aniabor(2011) defined entrepreneurship as a process of creating
something new with value by devoting the necessary time and efforts assuming the
accompanying financial psychic and social risks, and receiving the resulting rewards of monetary
and personal satisfaction and independence.
Entrepreneurship is not just acquiring the abilities for innovative businesses and
opportunities; it also involves the nature of those abilities acquired. Azubike (2006) noted that
entrepreneurship means having the abilities to find andevaluate business opportunities, gather the
necessary resources, initiate appropriate action to ensure success, and implement actions to take
advantage of the opportunities rewarding outcome. Entrepreneurship refers to the willingness
and ability of an individual to seek investment opportunities in an environment, and be able to
establish and run such investment successfully based on the identified opportunities (Gana,
2001). Supporting this view Osuala (2004) and Duru (2006) see entrepreneurship as a specialized
training given to students to acquire skills, ideas and management abilities necessary for self-
reliance. The art of concentrating, controlling, planning and directing the other factors of
production is entrepreneurship (Onu, 2013). Meredith in Onyekonwe and Peter (2008) also
asserted that entrepreneurship has to do with a combination of personal characteristics, financial
14
16
means and resources within your environment and taking advantage of them for rewarding
outcome. Entrepreneurship can be taught, learnt, developed and nurtured for growth in the life of
an individual.
Entrepreneurship development is a process of human resource development aimed at
providing appropriate skills to a pool of entrepreneurs and using the resources of the economy to
ensure continuous availability of this for wealth creation and enterprise building (Iromaka and
Uche, 2008). According to the authors, developing entrepreneurial skills involves a process of
human capacity building through formal and /or informal training, inculcating in the
entrepreneurs basic skills such as financial management skills among others. Okiti-Okagbara in
Iromaka et.al (2008) described entrepreneurial development as a programme of activities to
enhance the knowledge, skills and abilities of individuals and groups to assume the role of
entrepreneur as well as efforts to remove all forms of barriers in the path of entrepreneur.
Rebecca and Benjamin (2009) supported this view by stating that entrepreneurship development
is all about learning the skills required to assume the risk of establishing a business and
developing the winning strategies and executing them with vigour, persistence and passion
needed to win any game. The authors stressed the need for entrepreneurs to learn new skills if
they are to achieve a significant firm performances.
Commentingon the need for the entrepreneur to learn new skill for the growth of their
businesses, Osuala in Obi (2013) advised that prospective entrepreneurs should have adequate
technical ability, sufficient conceptual ability to visualize, co-ordinate and integrate the various
operations of the business into a synergistic whole. Entrepreneurs are made through experiences
and training. Entrepreneurship is the act of being an entrepreneur which means one who
17
undertakes innovations, finance and business acumen in an effort to transform innovations into
economic goals (Onu, 2013).
An entrepreneur is a risk taker who has consistency with his goals and objectives in
different situation. Nwaokolo and Osuala in Olayinka, Olufemi, Adenuga, Adeyemi and Yusuf
(2010) viewed an entrepreneur as a person who makes profit out of self-established trade or
business, who coordinates factors of production and bears the risk of uncertainty by investing
scarce resources on trade and business ventures. An innovator or developer who recognizes and
seizes opportunities; converts those opportunities into workable or marketable ideas; add value
through time, efforts, money or skills; assumes the risk of the competitive market place to
implement these ideas; and realizes the rewards from these efforts is an entrepreneur (Kuratko
and Hodgetts, 1992). According to Meredith, Nelson and Neekin Afolabi et.al (2011),
entrepreneurs are action-oriented and highly motivated individuals who take risks to achieve
goals. An entrepreneur is a businessman who makes decision that have significant impact on his
organization; he is always dominant, sociable, adventurous, intelligent and highly perceptive
(Afolabi et.al, 2011). Onu(2013) asserted that entrepreneurs operate in a dynamic environment
and must adapt to changing needs and wants of consumers. This implies that entrepreneurs
innovate ideas and businesses according to the needs of their environment. Entrepreneurs
combine the factors of production land, labour and capital in such a way as to effectively
produce tangible products of value (Onu, 2013).
Entrepreneurs aregenerallyclassified according to type of business, technology use, and
entrepreneurial development among others. Chima (2013) stated that entrepreneur is a French
word literally translated to mean“between-takers” or “go between”. According to the author, it
can further mean the development of small and medium businesses based on creativity and
18
innovation. Iromaka (2008) also classified entrepreneurs into innovators, calculating inventor,
over-optimistic promoter and organization builder. According to the author, innovators and
inventor do not care about what happens to their idea after bringing it to the notice of the public,
while optimistic promoters see to the continuation of the existence of ideas brought by
innovators, and organization builder continue to manage and enjoy the profit of the ideas. Also
on the classification of entrepreneurs, Alben in Igeraharha (2008) classified entrepreneur into
entrepreneur (good at influencing decision) entrepreneur (creativitye.g song and film writers)
Intropreneur (organize and simplifying information, e.g software creator) and autopreneur
(enjoys seeing money grow e.g saving account owner). Entrepreneur can be classified into
innovative, initiative, Fabians and Drone entrepreneurs. (Barika in Thom-Otuya, (2008)
according to the author innovative entrepreneur introduces new ideas and technology, new goods
and new method and are interested in reorganizing the enterprise for good. Imitative
entrepreneurs adapt successfully to innovations, Fabians entrepreneurs are cautious and doubtful
to changes while drone entrepreneur refuses to adopt opportunities to make change. Most
entrepreneurs in Nigeria are imitative and adopt already existed business.
The importance of entrepreneurship in the development of the nation’s economy cannot
be over emphasized. Osuala (2004) asserted that among other things, thebenefits of
entrepreneurship at the individual level is that one becomes his own boss, financial security and
joy of achievement. This implies that entrepreneurship promotes self-reliance. Entrepreneurs
have been recognized as veritable engines of growth and development (Onu, 2013). Global
Entrepreneurship Monitor in Barringer and Ireland (2006) reported that “the national level of
entrepreneurial activity has a satisfactory significant association with the national level of
economic growth”. Idomeh, Ainabor and Okorie (2008) also stated that, the growing importance
19
of the role of entrepreneurs in a country’s economic growth and development has stirred up both
developed and developing countries to formulate policies that would promote entrepreneurship
development in their economies. Entrepreneurship is also a learnable skill which can be
developed in an individual.
Skills
Skill is an ability to perform a particular activity effectively. It is the ability displayed in
the performance of a task (Osinem and Nworji, 2005). Ezeagu (2005) also viewed skills as the
ability to use one’s knowledge effectively and readily in execution of a performance; technical
expertness; a power or habit of doing anything competently. It is a well-established habit of
doing things by people (Uga, 2006). According to Okorie (2000), to possess a skill is to
demonstrate active thinking and behaving in a specific activity in such a way that the process
becomes natural to the individual through repetition or practice. Onuka (2003) also observed that
a person who works productively is skilled because he has acquired the habit of performing a
task in all acceptable manners within his job. In the words of Osuala (2004), skill is the ability to
put into use acquired competencies, attitudes and behaviour after an exposure to theories and
practices inherent in a field of study. This implies that skills are acquired through exposure to
practice. Thus financial accounting teachers should not only teach the students the theoretical
aspect of accounting in the class rooms, students should be channeled to real life practices for
effective skill acquisition.
Commenting on effective skill acquisition,Isyaku (2003) observed that one way to
remedy the imbalance between education and employment is to direct educational effort towards
developing skills and attitudes conducive for employment. Nnachi (2007) also explained that an
individual may hardly be skilled in a task without exposure, training or practices. Skill
20
acquisition is very imperative for effective entrepreneurship management.Akpotowoh (2005)
noted that most small scale businesses fail not because they do not have the necessary capital but
because they lack the pre-requisite skills required to remain in because noting the causes of
business failure.Osuala (1993) also asserted that the causes of business failure includes;
management incompetence, lack of experience, unplanned expansion and unethicalbehaviour
among other things. It therefore, becomesmore imperative for senior secondary school students
to acquire the required basic financial accounting skills that will equip them to become better
managers of their own businesses oreven to work effectively in paid employment.
Financial Accounting
Financial Accounting is a branch of accounting that deals with collecting, recording,
analyzing and communicating financial data of a particular business to the users of such data.
American Accounting Association (AAA) in Kazeem and Longe (2000) defined financial
accounting as the process of recording, classifying, selecting, measuring, interpreting and
communicating financial data of an organization to enable users make assessments and
decisions. It is a process that deals with measurement and it involves the collection, classification
and presentation of information in monetary terms on economic activities, in the events,
transactions and communication of the information in appropriate form for internal and external
user groups (Ugwu, 2003). It is the measurement statement or provisions of assurances about
financial information primarily used by lenders, managers, investors, tax authorities and other
decision makers to make resources allocation decisions between and within companies,
organizations and public agencies (Wikipedia the free encyclopedia, 2011). Financial accounting
is very important in the financial management of any business.
21
Commenting on the importance of financial accounting in the financial management of
any business,Alagye (2013) noted that financial accounting helps to ascertain the profits of and
losses, income and expenditure any business; it also determines the growth and provide financial
information about the organization. Osuala (2004) identified that financial accounting helps to
understand the concepts of assets, liabilities and entrepreneurship so that the fluctuation in
business cycle may be correctly interpreted and business papers and records rightly analysed.
There are factors which no manager can ignore; it is very important that every entrepreneur
possess the basic or knowledge of accounting (Ezeani, 2012). According to the author, this
knowledge to the author, will help in reducing the rate at which small scale businesses go into
liquidation,Longenecker, Moore and Petty in Ademola, Olukotan, James and Ifedokpo (2012)
noted that research conducted in 1993 by Dun and Bradstreet company on the causes of business
failure showed that lack of financial accounting knowledge was 47.3 percent while economic
factor was 37.1 percent, neglect, fraud, disaster, strategy and experience was 3.8, 3.8,6.3,1.0 and
0.6 percents respectively.
Improper keeping of financial accounting records affects the growth and development of
any business. Financial accounting information is vital for showing indebtedness of a business.
In the business world today, majority of transactions are on credit basis and the use of the term
debit and credit throughout in financial accounting recognizes the importance of credit
transaction. Balty in Ali (2001) also recognized that banks and other financial institution who are
concerned with lending could ascertain the likely risk involved in granting a loan through
financial record keeping. Supporting this view,Osuala (1995) stated that there is correlation
between inadequate financial accounting record keeping and the business organization. Financial
accounting records have become the foundation on which the totality of modern businesses
22
depends on. This is because without these records, it will be impossible to ascertain the level of
business susceptibility to fraud (Ademola et.al, 2012). Various skills embedded in business
related programmes (financial accounting included) needed to be explored and learnt by its
prospective graduates for them to succeed as later entrepreneurs (Obi, 2009).
It takes special skills to succeed as an entrepreneur (Akinola, 2001). Anne Boyele in Ali
(2001) also observed that the possession of the required skills by the employees will make them
fit to work in any establishment in an organization and more especially have the opportunity of
becoming executives in future time if they are able to acquire and utilize the needed skills. Batty
in Ali (2001) noted that financial accounting has grown into its present form to meet a number of
requirements which includes: the need to supply information required by law. Financial
accounting information is vital for showing the indebtedness of a business. In the business world
today, majority of transactions are on credit basis and the use of the term debit and credit
throughout in financial accounting recognizes the importance of credit transaction.
Modern business organizations have employed accounting as a communication tool, a
control mechanisms, decision tool and aids. It also serves as a measurement of activity outcome
in monetary terms. Ajuogu in Ali (2001) supported this view by pointing out that, in our
contemporary societies;accounting has often been regarded and called the language of
businesses. The underlying idea of cash management is the attainment of business growth
through maximization of available funds. No wonder Brigharm in Ali (2001) regarded cash as
the oil that lubricates the wheels of businesses. The author further explained that management of
cash is crucial because business development is often constrained by shortage of productive
factors a critical one being capital. Cash can only be managed well through the use of proper
23
financial record keeping (cash book). Therefore, financial accounting skills are the basic
foundations of any successful business.
Financial Accounting Skills
Financial accounting skills that are pertinent to entrepreneurial successes as identified by
claautier and under down, Hodget, Ajayi, Reed in Ademola etal (2012) includes; source
documents (invoice, receipt, bank teller) which are recorded in subsidiary books (journals) and
posted to different ledgers (debtors, creditors and the general ledgers) and is checked by trial
balance and subsequently, the final reports (balance sheet). Igbo in Akpotowoh (2005) identified
some of the accounting and financial skills required by entrepreneur for successful operation of a
business enterprise as ability to know gross and net profit, prepare daily cash repots, final
account (profit and loss accounts and balance sheet) among others. Also commenting on the
financial skills,Agbonifoh (1999) maintained that in the competitive world, the key factors are
costs, prices, turnover and profits. At the senior secondary school level, the basic financial
accounting skills required for entrepreneurship development are the prime or subsidiary book
entry skills, the cash book entry skills, the bank reconciliation skill, ledger skills, the trading,
profit and loss account skills and the balance sheet skills(FRN,2011).
Prime or Subsidiary Book
The prime books are books of original entry or subsidiary books in which transactions
from source documents are recoded first before they are posted to the ledger. In line with the
above view,Akintelure and Oguobi (2003) defined prime books as the books of original entry or
primary books of accounts used to record all business transaction before posting to the ledger.
Ademola etal (2012) also saw prime books as descriptive and chronological day books (diary-
like) used in recording day to day financial transactions. Financial transactions are
24
businessactivities that deal with payment and receipt of cash on daily basis and those activities
whose settlement is to be done at a later date. Subsidiary books are used to make first entry of
transaction before posting into the ledger (Longe and Kazeem, 2012). Oguobi and Akintelure
(2003) also saw subsidiary books as the records of transactions entered in separate books mainly
for the purpose of listing and classifying the various transactions as they occur and to avoid the
risk of errors of omissions and direct entries in the ledger. The use of subsidiary books therefore
prevents the ledger from containing too much detail. The subsidiary books also assist in the
preparation of ledger, trial balance and final accounts. The subsidiary or prime books includes;
the sales day book or sales journal, purchases day book or purchase journal, return inward day
book or sales returns journal, returns outward book or purchases returns journal, journal proper
or general journal and the cash book
Sales Day Book or Sales Journal
This is a subsidiary book used in recording all sales of goods made on credit (goods not
yet paid for). The seller enters the sales day book from the sales invoice. An invoice is a source
document issued by the seller to the buyer describing the goods bought, quantity bought and the
price. The sales day book is not part double entry records because it is not an account. After
entering in the sales day book, the customer’s personal account is debited while the credit entry
to the sales account is usually delayed till the end of a stipulated period (which may be weekly,
monthly or quarterly), when the sales day book will be totaled and posted to the credit side of the
sales account in the general ledger posting to the credit side of the sales account (giving account)
completes the double entry principle which started with the debit entry in the customers personal
account (receiving account).
25
The sales day book gives the total amount of credit sales at a particular time.
Commenting on the ability of the students to be able to draw up a sales journal, Udo (2001)
stated that the ruling of the sales journal is the same with that of purchases journal but the
striking difference lies in the posting the items to the ledger. According to the author, the total of
the sales journal is always posted to the credit side of the sales account since the sales account is
giving out goods on credit.
Sales Day Book
Date Particulars/names Folio Detail Total
N N
X X
Total transferred to sales account XX
Figure: 1 Format of sales day book.
Source:Kazeem and Longe (2012)
The Purchases Day Book
The purchases day book is used for recording goods bought on credit from suppliers. The
credit purchases are listed in the purchases daybook as they occurs, the suppliers personal
account is credited while the debit to the purchases account is also delayed till the end of agreed
period by the owner (entrepreneur) when the total of the purchases day book is transferred to the
debit side of the purchases account (receiving account) as the double entry principle is completed
in the supplier’s personal account (going account). The purchases day book gives the total
amount of credit purchases at the end of a stipulated period of time. The skills in entering items
into the purchases journal includes: the ability to identify items to be posted into the book.
Commenting on this skill, Udo (2001) asserted that the particulars of items to be posted in the
26
purchases day book are usually copied from the invoice sent by the supplier. According to the
author, to the seller, it is the sales invoice, the particulars of which are entered in the sales journal
and to the buyer it isthe purchases invoice the particulars of which are entered in the purchases
journal.
Purchases Day Book
Date Particulars/Names Folio Detail Total
N N
X X
Total transferred to purchases account XX
Figure: 2 Format of Purchases Day Book
Source; Akintelure and Oguobi (2003)
Returns Inward Day Book or sales Returns Journal
This subsidiary book is used to record goods sold but later returned for reasons of
defective, under-size, irregular colour and others (Akintelure and Ogbuobi (2003). In this book,
the date the return was made, goods returned and the reasons for their return are recorded. Igben
(2009) noted that when customers return goods, “credit notes” are issued to the customers
indicating that their personal accounts are being credited with the value of goods they return
thereby reducing the amount being owed by them. In the return inward day book, all the credit
notes are listed at the end of a specified period and the total of the returns debited to the return
inward account in the general ledger while the corresponding credit entry will be in the
customers personal accounts. Also the return inward day book is outside the double entry
systems but prevents congestion of the ledger. Still on the ability to post items in the return
27
inward journal, Udo (2001) noted that trade discounts originally granted to a buyer by a supplier
are taken into consideration when entering the returns book. These according to the author must
be deducted from the list prices of the goods returned.
Format of Return Inward Day Book
Date Particulars/names Folio Detail Total
N N
X X
Total transferred to return inward account XX
Figure: 3 Format of Return Inward Day Book
Source; Kazeem and Longe (2012)
Returns Outward Day Book or Purchases Returns Journal
When goods are returned to suppliers, “debit note” are issued to them to indicate that the
supplier’s personal account are debited with the value of goods returned to reduce the debt being
owed to them (Igben,2009). The debit notes are listed in the return outward day book and totaled
at a specified later date and transferred to the credit side of the return outward account while the
supplier personal account are debited.
Commenting on the timing skill in posting to the return outward journal, Longe and
Kazeem (2012) warned that return outward book is usually entered immediately goods are
returned as the return outward account is being credited, suppliers account is debited in the
ledger. The author stated that the particulars entered in the return outward day book are taken
from the credit note sent by the supplier of the goods and warned that the posting in the return
outward journal should not present any difficulty to the students as goods returned to a supplier
28
are regarded as if they are re-sold to him as such, the suppliers account is debited and the
corresponding credit entry made in the returned outward ledger account.
Returned Outward Day Book
Date Particulars/names Folio Detail Total
N N
X X
Total transferred to return outward account XX
Figures: 4 Format of Returned Outward Day Book
Source:kazeem and longe (2012)
Journal Proper
The journal proper or general journal is used for the purpose of recording transaction
which because of their nature cannot be entered in any other book of prime entry (Akintelure and
Oguobi, 2003). These transactions include the purchases and sale of fixed assets on credit,
correction of errors, transfer from one account to another and other related transactions. Kazeem
and Longe (2012) defined journal proper as a book of prime entry used in recording initial
entries in chronological order. Initial entries are opening balances brought from ledger accounts
cash book which an entrepreneur closes the year with and is brought forward at the beginning of
the new accounting year. In the journal proper, transaction are entered and classified as Debit
(Dr) and credit (Cr) before they are posted to the ledger. The general journal has five (5) column
for data, particular or names, folio, debit and credit.
The general journal contains miscellaneous matters that cannot be conveniently group
together like purchases and sales of assets.Omuya (2011) stressing on the posting skill posited
that to standardize matters, that the name of the account to be debited should always be shown
29
first while the name of the account to be credited is written not directly under the name of the
account to be debited but inserted to the right hand side. This according to the author helps in the
reading of the journal. Also commenting onthe ability to explain the transactions that take place
in the narration should be clear and concise to enable users appreciates the nature of any
transaction journalized. Longe and Kazeem (2012) while stressing on the ability to enter items
into the journal proper noted that entries in the journal proper may be simple or composite.
According to the authors, simple entries involves one account to be debited while composite may
involve several accounts to be debited and only one account to be credited and vice versa.
Journal Proper or General Journal
Date Particulars/names Folio Dr Cr N N X X Figure: 5 Format of Journal Proper
Source:Udo (2011)
In the particulars column, the account to be debited comes first with (Dr) at the end and
the amount written at the debit column, followed by the account to be credited. A brief
explanation of the entry is given to show the nature of expenses made on credit, such explanation
is known as “Narration” which differentiates the general journal from other day books
Cash Book
The cash book is a subsidiary book as well as a ledger used in recording transactions
made in cash. As a subsidiary book, the cash book is used to decongest the ledger. With regards
to thisIgben (2009) noted that in a business organization, the function of receiving and paying
out money required a considerable number of entries and if posted directly to the ledger will
congest the ledger; the objective of decongesting the ledger is carried one step further by taking
the bank and cash account out of the ledger and combining both in one subsidiary book known as
30
cash book. As a subsidiary book, when an entry is made in the cash book, one side of the double
entry is completed; the remaining will be taken care of in the customer’s cash accounts. Unlike
other subsidiary book whose totals are being transferred to their ledger accounts.
When the cash book is treated as a ledger, the principle of double entry remains
unchanged. The principle stated that “in every debit entry, there must be a corresponding credit
entry and vice versa: A ledger, according to Longe and Kazeem (2012) is a book which contains
in a classified and summarized form, a permanent record of all transactions. According to the
authors, a ledger is divided into two parts by a vertical line. The left side of a ledger is called the
debit side or the receiving side while the right side is the credit side or the giving side. In the
debit side all cash or cheque received are being recorded and all cash payment or cheques are
recorded is the credit side. A cash book is a book used for recording the receipt of income and
trade payment of money either in cash, cheque, bank draft or postal orders (Akintelure and
Oguobi, 2003).
A Ledger Dr Cr N Receiving side
N Giving side
Figure: 6 Format of a Ledger Source: Researcher
The cash book is the only book that combines the functions of the subsidiary and
principal book. The types of cash book includes; the single column cash book, the two or double
column cash book, the three column cash book and the petty cash book.Longe and Kazeem
(2012) advised on the ability to post items correctly that in the preparation of the cash book,
students should write up the cash book first since the cash book is a prime book also before
transferring the items to the individual ledgers. This according to the author will make the work
31
easy and convenient. The authors further noted that in balancing the cash book, the balance
carried down (c/d) will be brought down (b/d) as closing balance which will be carried forward
to next month as opening balance. Cash book can be single column, double column, three
columns or a petty cash book.
The Single Column Cash Book
The single column cash book usually has one amount column for either cash or bank on
the debit and credit sides respectively. In this case, both the cash and bank columns are kept
independent of each other. All money received are recorded in the debit side while all expenses
made in cash are recorded in the credit side.
Single Column Cash Book
Dr Cr Date Particular Folio Amount Date Particular Folio Amount
N: K
N: K
Figure: 7 Format of a Single Column Cash Book
Source: Akintelure and Oguobi (2003)
Two or Double Column Cash Book
As the name implies, two column cash book is so-called on each side for cash and bank
transactions. A cash book that incorporates “Bank” and “Cash” columns on either side of the
account is a double column cash book (Akintelure and Oguobi, 2003). The double column cash
book therefore has ten (10) columns altogether, five (5) columns on each side consisting of the
date, particulars, folio, cash and bank columns.
32
On the debit side, cash received are recorded under the cash column while money
received in form of cheque is recorded in the bank column on the debit side. Also on the credit
side, all cash expenses made are recorded under the cash column while all expenses made by
cheque are recorded under bank column. A contra entry takes place in double column cash
book. A contra entry occurs when cash is taken from the office to the bank or when money is
withdrawn from the bank for office use. When contra entry happens, the double entry principle is
completed in the same cash book and at the same time and the letter (c) is written under the folio
column indicating contra entry.Let us assume that N1,500 is withdrawn from the bank for office
use on 12th. The posting will look as follows in double column cash book
Two Column Cash Book Dr Cr
Date Particulars Folio Cash Bank Date Particular Folio Cash Bank
12th
Bank
C
N
1500
N
12th
Cash
C
N N
1500
Figure: 8 Format of Two Column Cash Book
Source: Researcher
This means that on the credit side bank account is giving out money while on the debit
side cash account is receiving the same amount and the double entry completed with the letter (c)
at the folio column indicating a contra entry. This is an important skill in posting into the two
column cash book (Omuya, 2011) stated.
Three-Column Cash Book
A three-column cash book has a discount column added to the two: columns for bank and
cash. A discount is an amount deducted off the sum due from customer if he pays his account
within a stipulated period (Udo, 2011). Discount can be trade or quantity discount for quantity
purchase or cash discount for prompt payment of amount due at a stipulated time. The three-
33
column cash book has twelve (12) columns, size (6) columns on each side for date, particulars,
folio, cash, bank and discount allowed column at the debit side and discount received at the
credit side. Discounts are usually given in percentages and are deducted from the amount due for
the customer.
Three Column Cash Book
Dr Cr Date Particulars Folio Cash Bank Date Particular Folio Cash Bank
N N N N
Figure: 9 Format of Three Column Cash Book
Source: Researcher
The cash book is usually summed up. The summing up of the debit and credit side of the
cash book and finding of their differences is called balancing. When the bank balance is on the
credit side, it means that there is an overdraft. An overdraft occurs when a bank customer takes
more than what he has in the bank to meet urgent needs (Kazeem and Longe, 2012). When an
overdraft occurs, it is usually a liability in the balance sheet. On the ability of students to draw up
a three column cash book, Omuya (2011) noted that the discount column on the debit or left side
of the three column cash book is for discount allowed while that in the credit side is for discount
received.
The Petty Cash Book
A petty cash book is a subsidiary book where minor expenses are recorded (Akintelure
and Oguobi, 2003). In this system, a specified sum of money called Float is giving to a petty
cashier who uses it to settle minor expenses instead of bordering the cashier who keeps the cash
34
account for small expenses. At a specified period of time,say one week, one month or quarterly,
the petty cashier balancing the petty cash book and the amount spent be re-imbursed. This means
that at the beginning of every specified time the amount of the petty cash book remains the same
i.e always up to the initial total.
The petty cash book has two sides, debit and credit sides. On the debit side, the amount
received, the date is recorded while in the credit side the analysis of expenses incurred is
posted.On the ability to obtain the information to be posted to the petty cash book Omuya (2011)
asserted that each payment made by the petty cashier will have to be supported by a voucher
showing the reason for the payment and signed by the person receiving the money, so that the
voucher serves as the source of information for recording items into the petty cash book. And on
the ability to enter and balance the petty cash book, the author stated that the entries on the credit
side of thepetty cash book are first made in the total column, and then are extended into the
relevant expense column; and at the end of the period, the payments are totaled and that the total
on the total column must equate with the sum of the other payment totals. The author further
commented on the ruling of the petty cash book that the receipt column represents the debit side
and analysis column on the credit side.
Petty Cash Book
Dr Cr Date Particular Folio Amount
N
Date Particular Total Analysis
Postage
N
Sundry
N
Travelling
Expenses N
Miscellaneous
N
Figure: 10 Format of a Petty Cash Book
Source: Researcher The prime or subsidiary book as stated earlier helps the entrepreneur to decongest the
ledger accounts with details of information concerning credit sales and purchase of goods and
35
also assists to reduce the risk of omission of items while posting to the ledger. No entry is posted
directly to the ledger from the source documents but must pass through the prime books. The
journal and the ledger are the two principle books of account. A source document according to
Kazeem and Longe (2012) is a document that supports documentary evidence of business
transactions. They include; invoice, credit note, debit note, receipt, petty cash voucher and
statement of account. The subsidiary books assist in the preparation of the ledger, trail balance
and final accounts which includes the trading, profit and loss account.
Bank Reconciliation Statement
When a customer opens a current account with a bank, he will open an account in his
book showing his dealings with the bank. These consist of a bank column in his cash book. Also
the bank in question opens an account for the customer. The entries in the bank’s book will be on
the opposite sides to those as shown in the customer’s book. The book which the bank prepares
showing the transactions between it and it’s customer is “Bank statement” (Kazeem and Longe,
2012). A bank statement is a copy of a customer’s account in the bank which is send to the
customer periodically and contains a corresponding double entry of all the transactions in the
bank account (Akintelure and Oguobi, 2003). The bank column in the cash book and bank
statement shows the same transaction on opposite sides all things being equal. In practice, it is
noticed that there used to be differences in cashbook balances and the balances in the bank
statement. These differences are so because of timing of entries in accounts (Akintelure and
Oguobi, 2003). Thus the need to reconcile both books (customer’s cash book and bank
statement). Longe and Kazeem (2012) defined bank reconciliation statement as a statement that
is prepared to reconcile the disagreement of the cash book and that of the bank statement.
According to the authors, the timing and information differences which can cause disagreements
36
between the customers cash book and bank statement includes; unpresentedcheques,
uncreditedcheques, dishonouredcheques, bank charges, interest and standing order among other
things.
Before a bank reconciliation statement is prepared, the balances in the customer’s
cashbook and that in the bank statement must be equal; as such when a customer gets a statement
of his account from the bank, he checks for the activities the bank perform on his behalf which
he is not aware of or have forgotten and use them to adjust his cash book balance to tally with
that of the bank statement. In line with this, Igben (2009) stated that before a bank reconciliation
statement is prepared, the customer must ensure that both the cash book and bank statement are
written up at the same date; and update his cash book by crediting cash book with bank charges,
commission on turnover and draft, interest on loan and overdraft, standing order and
dishonouredcheque and by debiting dividend received, interest received and any other error
identified must be corrected in the cash book
Items used for the adjustment of the cash book for the preparation of bank reconciliation
statement are summarized below
Dr Adjusted Cash Book item Cr
Debit Credit
Interest received Bank charges
Dividend received Interest on loan
Trade credits Standing order
Errors’ in the cash book Dishnouredcheques
Error’s in the bank statement
Figure: 11 Adjusted Cash Book Items
Source; Researcher
37
When the cash book balance has been adjusted to tallywith the balance in the bank
statement, the bank reconciliation statement must begin with balance as per adjusted cash book
and end with the balance per bank statement. Hence the format below;
Balance as per adjusted cash book N X Add: Unpresentedcheque X X
Less uncreditedcheques/adjustment (X)
Balance as per bank statement X
Figure: 12 Format of Bank Reconciliation Statement
Source: Longe and Kazeem (2012).
The importance of bank reconciliation statement to small scale businesses is that it helps
the entrepreneur to check his account with the bank and also help to dictate error(s) and checks
fraudulent activities. Talking about error, Igben (2009) warned that an entrepreneur should
notifythe bank of its error(s) for correction immediately noticed; and that if the entrepreneur
finds out that unpresentedchequesremainsunpresented for too long, the entrepreneur should get in
touch with the payee to find out why. The author advised that if dead or lost that bank should be
notified not to honour the cheque to ensure that payment is not made to the wrong person(s).
Igbenfurther advised that if uncredited or lodgmentcheques remains uncredited for an
unreasonable period, that it should be taken up with the bank to make sure it has not been
credited in error to another account by the bank. Unpresentedcheques are cheques issued to
supplier(s) (payee) which they have not presented to the bank for payment while
uncreditedcheques are cheques which the customer presented to the bank for credit which has not
yet been done. The skill on the ability to prepare a bank statement, Longe and Kazeem (2012)
suggested that students can deal with bank statement from two perspectives: preparation of only
38
the bank reconciliation statement and the preparation using the adjusted cash book. The authors
further stated that in using adjusted cash book method, that any item that appeared in the
adjusted cash book will not be recorded again in the bank statement, Udo (2011) also advised
that in comparing the book with the bank statement that the items that appear in one are usually
checked against those that appear in the other by ticking, hence the ledger account rule.
LedgerClassification
An account is a record in a double entry system that is kept for each class of assets,
liability, revenue and expenses (Longe and Kazeem, 2012). The double entry principle as had
been stated earlier states that for every credit entry, there must be a corresponding debit entry
and vice versa. Basically, accounts are classified into personal and impersonal account (Igben,
2009). The author further stated that impersonal account is sub-divided into red and nominal
accounts. Having a contrary view,Udo (2011) classified account into three namely; personal
account, real account and nominal account. These classifications re the same by implication
because impersonal account is further sub-divided into real and nominal accounts.
Personal accounts are accounts owned by individual persons or individual firms that has
business dealing with the organization. They are accounts with names of individual and firms
written on their tops. Udo (2011) defined personal accounts as class of account that shows
dealings with persons. Examples of personal accounts include; debtors account, creditors
account, capital accounts, drawings account and bank accounts. In personal accounts, the rule of
double entry principle if applied is to debit the receive (debtor) and credit the giver (creditor).
Thus if goods are sold to Mr. Obi becomes the receiver (debtor) while Ayz enterprises becomes
the giver.
39
Account Classification
Figure: 13 Format of Account Class
Sources:Igben (2009)
Personal Account
Impersonal Account
Bank A/c
Creditor A/c
Debtor A/c
Capital account and drawing
Account
Nominal Account
Real A/c examples
building, furniture,
land, motor vehicle, stock
cash
Revenue Account
Expenses Account
Intangible assets
Account
40
As have been seen that every class of account has a rule for recording transactions into it
in obeying the principle of double entry. Items posted into ledger accounts needed to be tested to
make sure that the book-keeper does the right thing. The skills is the ledger classification
includes the ability to rule the ledger, title it and ability to identify which account to be debited
and the one to be credited. Stressing on these skills Udo (2011) urged students to commit to
memory the principle of “credit Giver” and Debit receiver”.
And on the ruling skill, the author noted that the ledger account is divided into two parts
by a central line and that the left side is the debit (Dr) side and the right side, credit side (Cr).
Omuya (2009) noted that title of an account is purely a matter of choice in a firm. According to
the author, the title of an account for postage stamps could be called “postage stamp account” or
“postage account” or “communication expense account”. And on the ability to balance up an
account, the author asserted that the two sides of the accounts are first added up, that the
difference between the side with greatest total and lesser side is usually inserted to the lesser side
so as to make the totals of the both sides equal. The author further warned that when doing this
that students should ensure that the two totals are written on the same level with one another. The
totals of accounts are further transferred to the trial balance.
Trial Balance
A trial balance is a list of balances in the ledger account gathered to test the accuracy of
the double entries as posted by the book-keeper. Akintelure and Oguobi (2003) viewed a trial
balance as a check of arithmetical accuracy of the book-keeping to test the double entry; whether
it has been completed in the ledger or not. It is a schedule that shows the debit and credit
balances extracted from the ledger to show the arithmetical accuracy of the ledgers. Commenting
41
on the importance of trial balance to the entrepreneurs, Igben (2009) stated that it serves as a
check on the “arithmetical accuracy” of the entries and also the basis upon which the trading,
profit and loss account and the balance sheet are drawn up. The author further warned that the
agreement of the trial balance does not mean that there are no errors in the entries because there
are some errors which do not prevent the trial balance from balancing.
A Trial Balance
Particular Folio Dr Cr
N
X
X
X
N
X
X
X
XX XX
Figure: 14 Format of a Trial Balance
Source: Researcher
As soon as an error(s) is/are dictated, it /they should be corrected immediately, but there
are cases where time cannot permit the staff or the book-keeper to correct the error immediately,
then the error is kept in a suspense account until it is corrected and once corrected, the suspense
account ceases to exist.
A suspense account is an account opened to take care of indicated error(s) that stops the
trial balance from balancing which ceases to exist as soon as the error is corrected. Angel fire in
Munirudeen (2003) defined suspense account as the account opened to take care of errors which
have caused an imbalance in the trial balance but which have not yet been dictated in the
business book. Vein, Galligan and Reid in Munirudeen (2003) explained that where the trial
42
balance does not balance, that there is the need to open a “General fix-it” account to sort it all
out. According to the authors, this account will show the difference between the sides of the trial
balance and that when everything is sorted; the account ceases to exist asthe difference will be
zero. This account, according to the authors, is a suspense account and further warned that it is
illegal to fix errors by deleting entries or crossing them out.
A suspense account is a temporary resting place for an entry that will end up somewhere
else once its final destination is determined (Stein, 2003). The suspense account if debited should
be shown on the balance sheet under current assets or if credit, under current liabilities.
Trading, Profit and Loss Account
Trading, profit and loss account constitutes part of the final accounts of a sole trader
(entrepreneur) or large firms as the case may be. It is two accounts merged in one. The trading
account is prepared to determine the gross profit or loss of a business at a particular time. Gross
profit is the profit obtained from sales less cost of goods sold. It is a profit got before expenses
incurred during the sales are being deducted. Kazeem and Longe (2012) viewed trading account
as a revenue account prepared to show the gross profit or gross loss of a business for a particular
period. According to the authors, the gross profit is the difference between sales and cost of
goods sold. Akinkelure and Oguobi (2003) sated that the gross profit or gross loss is arrived at
after charging the goods and materials and other items of direct cost. Direct cost according to the
author includes costs that can be traced directly to the sale or production of particular goods.
The gross profit figure can be used to compare the performance of a business with that of
another and helps in taking certain progressive business decisions with regards to pricing of
goods for sale. Profit as we know is the basic reasons for the establishment of any business and
when calculated, it is used to compare the actual profit from the expected profit and from the
43
decisions about the business is made. In the preparation of trading account, the balance in the
sales account which is usually a debit balance is being transferred to the credit side while the
balance in the purchases account which is always a credit balance is being transferred to the debit
side to complete the double entry principle. Stock account which usually has a credit balance is
also closed by bringing the balance to the debit side of the trading account as closing stock
deducted from goods available for sale. All the balances in the return inward account and return
outward accounts are also transferred to trading account in credit and debit sides respectively to
close the accounts.
Profit and loss account is the continuation of trading account. It is the part of final
account where net profit or net loss is being obtained. In the preparation of profit and loss
account, the gross obtained from trading account which is always a debit balance is transferred to
the credit side of profit and loss account. Also income or gains are credited while expenses are
debited. The difference between the credit side and the debit side gives the net profit or net
lossIgben (2009) described the net profit as the excess of all incomes over all expenses and net
loss as excess of all expenses over all income. The author maintained that, the income from sale
of goods are dealt with in the trading account while the incomes from other sources such as
interest received on bank deposits, discount received and rent received are dealt with in the profit
and loss account.
The author further stated that in the measurement of incomes for an accounting period,
that only the income earned as opposed to income received are recognized in the profit and loss
account. This implies that the net profit reported in the profit and loss account will not be the
same as the amount of cash in hand and at bank because of the fact that many of the incomes and
44
expenses in the profit and loss account are recognized in one accounting period while they are
actually received and paid in another period.
The net profit increases the capital of the entrepreneur. In view of this,Omuya and wood
(2009) noted that the credit entry for the net profit is always in the capital account. Supporting
this view,Longe and Kazeem (2012), stated that the net profit must be added to the capital
account and the net loss must be deducted from the capital account. The authors further
summarized the procedure for preparing trading, profit and loss account as follow:
• The revenue earned is the first item that will be recorded as sales on the credit side less
return inward.
• The statement contains a cost of goods sold section that shows the total cost of inventory
that was sold during the period.
• The cost of goods is deducted from sales to get intermediate or gross profit and
• That the operating expenses are subtracted from gross profit to determine net income or
net profit or loss. From trading, profit and loss account, the net profit or loss is added or
deducted from the capital account as the case may be and the capital account balance
forwarded to the balance sheet.
Commenting on the ability to name or title trading, profit and loss account shows the
results of a business for a period thus the title; profit and loss account for the year ended…….
While balance sheet shows the financial position of a business at a certain date hence the title
balance sheet as at (date/month/year). And on the ability to calculate the gross profit Udo (2011)
warned that great care should be taken to see that correct valuation is placed on the closing stock
45
as any wrong valuation will certainly affect the gross profit. The author further stressed that
stock should be valued at the cost price or at market value. Udo further advised that wages could
be debited to reading account if it is a production concern or debited to profit and loss account if
it office wage: But if different accounts are kept for salaries and wages, should be debited to
trading account and salary to the profit and loss account.Omuya (2009) also stated that revenue
isthe opposite of expenses and therefore appears on the opposite side to expense in the profit and
loss account. The net profit got from the profit and loss account is usually transferred to the
balance sheet.
The Balance Sheet
A balance sheet is a statement that shows the value of assets owned and the value of
liabilities owed by a business enterprise at a particular period of time. Balance sheet is not an
account: it is a statement showing the balances remaining in the books of accounts. It is a
statement of assets and liabilities at a particular moment showing the solvency or insolvency of a
business concern at a particular time (Akintelure and Oguobi, 2003). The balance sheet shows
the value of assets and liabilities and the ability or inability of the business to meet its financial
obligations.
Assets are values that belong to a business. They are resources owned and used by a
business organization for the purpose of generating income. An asset yields future economic
benefits to the business organization owning it (Igben, 2009). An asset may be fixed or current.
Fixed assets are assets whose useful economic life exceeds one year. They are assets which are
of permanent nature and they create more revenues for the business. Examples of fixed assets
are: furniture, land, building, motor vehicles, machineries and others. Current assets are assets
whose useful economic life does not exceed one year. They exist for only a short time before
46
they are transferred into other kind of assets. Igben (2009) viewed current assets as assets whose
composition constantly changes. According to the author, current assets change from cash at
bank or in hand to stock when goods are purchased for resale; then to debtors when the goods are
sold on credit and back to cash at bank or in hand when the debts are collected. Current assets
sometimes are referred to as circulating assets because of their transformation nature. The value
of fixed assets are reduced its value as it is continuously being used. Sometimes depending on
the nature of the business, these reductions in value used to be provided for as depreciation.
Companies and allied Matters Act (C.A.M.A) 1990 stipulated that provisions be made on
the depreciation of assets, bad and doubtful debts and on debtors. On the balance sheet, these
provisions are deducted from the assets to which they relate. Provision for depreciation is
deducted from the cost or revalued amount of fixed assets to obtain the net book value of the
fixed assets while both provision for bad debt and provision for discount on debtors are deducted
from gross value of debtors to obtain thereliable value of debtors. Depreciation is the gradual fall
in the value of a fixed asset arising from wear and tear, passage of time and Obsolescence. Longe
and Kazeem (2012) defined depreciation as deduction in the economic service potential of an
asset as a result of wears, tears, passage of time. The authors further stated that when fixed assets
are sold, part of cost not recovered is termed depreciation and that the amount changed as
depreciation can be used for the replacement of the assets at the end of the useful life. The wear
and tear is a physiological factor like erosion, dampness, rust and decay which can cause an asset
to reduce in value. Depreciation of assets can be calculated using straight line method, reducing
or diminishing balance method among other methods.
Liabilities on the other hand are amounts owed by the business to outsiders. They are
claims by outsiders over the assets of the business. Akintelure and Oguobi (2003) defined
47
liabilities as the value or amount which a business is legally bound to pay. It is the indebtedness
of the business to outsiders and the claim on the assets of an enterprise. Liabilities can be long
term or current in nature. Current liabilities are amounts payable within a short period of time,
usually within one year. Examples of current liabilities are creditors, bank overdraft, bills
payable, loan and others while long term liabilities are amounts expected to be paid after one
year. They include long-term loan and debentures.
The balance sheet layout is framed with capital and liabilities on the left-hand side of the
T account format and the assets on the right-hand side. Capital is the original fund or amount
with which an entrepreneur entered a business with in addition to any profits retained inthe
business. It is the excess of assets over liabilities should the liabilities exceed the assets, this
results into “Deficiency” and the entrepreneur’s account would be represented by a balance on
the assets side indicating a state of insolvency (Longe and Kazeem, 2012). This means inability
to perform its financial obligations. The skill in the balance sheet is including the ability to
identify different types of assets and the ability to post them correctly at the right place stressing
on these skills Udo(2011) warned that assets in any balance sheet must be arranged in a logical
sequence beginning with the fixed assets with the permanent as the first item. Following this rule
according the author, Goodwill should appear before land and building, furniture and fittings
before motor van etc.Current assets begins with stock and ends with cash in hand which is the
most liquid of all the assets.
The ability to prepare Trading, profit and loss account and the Balance sheet statement is
one skill in financial accounting and the ability to analyse and interpret these accounts to be able
to take valid business decision is another skill. From the balance sheet, the entrepreneur needs
the interpretation skill to be able to analyse the financial position of a business at a particular
48
time. The entrepreneur should be able to calculate and interpret profitability and liquidity ratios.
Ratio, according to Kazeemand Longe(2012), is the relationship that exists between two figures.
The authors commenting on the importance of accounting ratio stated that it is used in the
interpretation of financial statement and provide mean by which various items in the final
accounts are compared to other items.
The profitability ratio measures profit earned over the period and the capital employed at
the end of the same period. It includes, gross profit percentage ratio, net profit percentage ratio,
return on capital ratio and turnover ratio. The profit ability ratio shows the effectiveness of the
management. Fluctuation can occur in the ratio when there is change in selling prices, volumes
of output and changes in stock valuation basis (Longeand Kazeem, 2012). All these financial
accounting skills are taught in the senior secondary schools.
Senior Secondary Schools/ Accounting Teachers
Senior secondary school education is a post basic education given to children after
completing the basic education at primary and junior secondary schools. It serves as final
foundation laying point for further careers of children. The National Policy on Education (2013)
section 3 sub-section 35 classified senior secondary education as a post – basic education and
career development (PBECD). The policy therefore, defined post-basic education and career
development as the education children receive after a successful completion of ten year of basic
education .This implies that at senior secondary school level children starts to build up their
future careers based on the training they receive.
One of the objectives of post basic education, as stated by the National policy on
education (2013), is to provide entrepreneurs technical and vocational job specific skills for self-
reliance and for agricultural, industrial, commercial and economic development. This also means
49
that at the end of senior secondary education, children supposed to have acquired the basic skills
that will equip them to be self- reliance.
Financial Accounting and Book keeping is one of the subjects marked as
entrepreneurship subjects by the national policy on education (2013) which will assist in
achieving the stated goals. One of the objective of studying financial accounting at senior
secondary school is to enable the students understand basic accounting principles for modern
business activities. Also the senior secondary education curriculum in Business studies volume 4
stated the general objectives of book-keeping and Accounting as to provide fundamental
instruction to help students assume their economic role as consumers, workers and citizens. In
order to achieve these objectives, financial accounting teachers has much role to play.
Financial accounting teachers in senior secondary schools has to rededicate themselves to
their job by always planning their lessons before attending classes for easy flow of the lesson.
Supporting this view,Akintelure(1998) asserted that financial accounting teacher’s effectiveness
in instructional delivery depends on their consideration of the nature of the subject during
instructional planning. This implies that teachers of financial accounting should always devote
time to instructional planning considering the nature of the subject. According to the author,
financial accounting is not a subject that can be mastered by mere memorization of the basic
rule; it requires total involvement of the learner in the learning process in sound theoretical
knowledge and intensive practice in application of the basic principles. Thus teachers should
plan their lessons in such a way that student’s activities and practices are included for better skill
acquisition.
Commenting on the importance of practice by student in financial accounting class, obi
(2005) observed that practices does not make perfect rather practices exposes the individual to
50
the possibility of learning by creating avenue for correction whenever mistake is made.Olaitan
and Mama (2000) also posited that it should be a deliberate attempt for the accounting teachers
to arrange and document classroom instructional activities in order before implementation.
Teaching involves planning methods (Offorma, 1994).
Financial accounting teachers in senior secondary schools should always employ
different instructional methods in the classroom for effective teaching and learning. Practical
methods, field trip, discovering method and lecture method among others are some of the
methods that can be employed by financial accounting teachers while teaching to ensure the full
participation and exposure of students to activities. Aliyu (2000) identified discussion method,
teacher explanation method, and demonstrative method, individual and group study methods as
methods appropriate for teaching financial accounting in senior secondary schools. Brooner
(2000) also suggested that the specialist and generalistic approaches are best for teaching
financial accounting. According to the author, the specialist approach focuses attention of the
teacher in producing professional in accounting class while generalistic view believed that
financial accounting should be taught as a language of business to meet the needs of those who
study it for personal use. The way a teacher presents a subject matter determines whether the
learner will like or dislike the subject (Onwuka in Ekahasemomhe, 2006). Therefore, as trainers
of future entrepreneurs at the senior secondary schools, financial accounting teachers should
endeavor to inculcate the necessary competences into the students by planning their lessons
appropriately and by using appropriate teaching methods. Brone (2006) noted the things to be
developed by teachers early in an accounting class as creation of a pleasant, yet business like
atmosphere to enable attractive and appropriate learning environment.
51
Senior Secondary School Students
Basic financial account skills required
Prim
e B
ook
Ent
ry S
kill
Cas
h B
ook
Ent
ry S
kill
Ban
k R
econ
cilia
tion
Ski
ll
Ledg
er S
kill
Tra
ding
, Pro
fit a
nd L
oss
Acc
ount
Ski
ll
Bal
ance
She
et S
kill
Entrepreneurship Development
Self or paid Employment
Self reliance and
Improved Standard of living
Figure 15: Schematic diagram of basic financial accounting skills required for entrepreneurship
development by senior secondary students.
Source:Researcher
52
The schematic frame work in figure 22 presents a view point of the basic financial
accounting skills required for entrepreneurship development by senior secondary school
students. The frame work dipitched that these basic financial accounting skills when fully
impacted into the senior secondary students will help to develop in the senior secondary school
leavers the entrepreneurship skills that will enable them to grow and manage their own
businesses.
These businesses when managed effectively with the knowledge gained from these
financial accounting skills will grow and stand to make the secondary school graduates self-
reliance and create jobs for others. The skills will assist the students to even fit in to paid
employments or jobs and in turn improve their standard of living and reduce poverty level
among the youth while some ill practices among the youths in the society will also reduce.
Theoretical Frame work
The following theories were reviewed; Need Achievement theory and Risk taking theory.
Need Achievement Theory
David Mcclelland postulated the need achievement theory in 1965. The theory stated that
there would be a relatively greater amount of entrepreneurial activities in the society where the
average level of need for achievement is relatively high. This psychological theory shows the
functionality of strong relationship between need to achieve economic development (N-
Achievement) and entrepreneurial activities. This theory is related to the current study in the
sense that various economic needs among senior secondary students in Anambra state will
motivate the youth towards identify wasting potentials around them and try to exploit them for
their economic development.
53
Risk Taking Theory
The risk taking theory was postulated by Richard Cantillon in 1848. The theory stated
that the entrepreneur is a specialist in taking on risk. He “insures” workers by buying their
products (labourservices) for resale before consumers have indicated howmuch they are willing
to pay for them. According to the theory, workers receive an assured income, while the
entrepreneur bears the risks caused by price fluctuation in the consumer market. This theory is
related with present study because it points to the fact that business is all about risk and to reduce
the amount of risks to be taking by the entrepreneurs (senior secondary students) financial
accounting skills are very necessary for effective decision making and will encourage the
entrepreneurs to always calculate risks and takes the most profitable ones.
Related Empirical Review
Ohachosim, Onwuche and Titus (2013) studied financial challenges of small and
medium-sized enterprises (SMEs) in Nigeria. A descriptive research design aimed at discovering
the importance of accounting information to small and medium sized businesses and to identify
the problems facing their growth. Using stratified random sampling technique and questionnaire,
the researchers collected the data from registered entrepreneurs. The collected data was analyzed
using standard deviation while the null hypothesis was tested using t-test at 0.05 level of
significance. This study is related to the present study in their topic contents as both of them
dealt with small and medium scale businesses. They are also related in their methods of data
collection and analysis, and the type research design they adopted. Both studies differed in their
areas of study, their populations and in the objectives of their studies.
Amoako (2013) conducted research on the accounting practices of small and medium
enterprises (SMEs) in Ghana. The purpose of the study was to discover the level of accounting
54
practices by SMEs in Ghana. The study adopted descriptive research design; using convenience
sampling technique the researcher sampled managers and entrepreneurs of SMEs. The data
collected through questionnaire was analyzed using percentages while the hypothesis was tested
at 0.05 level of significance using t-test. The study revealed that SMEs owners do not keep
proper accounting records and recommended among other things that keeping accounting
records should be made mandatory for all SMEs in Ghana. The study under review is related to
the present study in the method of data collection and analysis and also in the contents of their
topics for both of them is concerned with financial accounting issues of the SMEs.They also
differed on their areas of study, objectives of their study, population of their studies and in the
sampling technique adopted.
Ademola, Oluuotun, James and Olore (2012) studied the role of record keeping in the
survival and growth of small scale enterprises inKogi state. The objective of the study was to
examine the role of record keeping in the growth and survival of SMEs and to determine the
records to be kept and the basic features of such records. The researcher used purposive sampling
technique to select the respondents from registered entrepreneurs and collected the data using
questionnaire. The collected data was analyzed using percentages while the null hypothesis was
tested at 0.05 level of significance using chi-square. The study discovered that owners of SMEs
in Kogi State do not keep records of their transactions and so cannot determine the growth of
their businesses and recommended that entrepreneurs should employ account clerks who are
knowledgeable in book-keeping. The study under review is related with the present study in the
content of their topics and they also adopted descriptive research design. They also related in
their method of data analysis and differed in their population, while the study under review
55
entrepreneurs, the present study intends to use teachers. They also differed in their methods of
data analysis and their areas of study.
Abdualrahim, Adenola, Oyebola, Muhtar and Abogun (2012) studied Accounting
principles of small enterprises inKwara state, Nigeria. The objective of the study was to
investigate if proper accounting records are being kept by SMEs owners. The researchers
adopted descriptive research design and used simple random sampling technique to select their
respondents from registered entrepreneurs and analyzed the collected using percentages while
the hypothesis was tested using t- test. The relatedness of the two studies is in their topic
contents, the design of the study adopted, and methods of their data collection and analysis. The
studies differed in their area of study and in the type of sampling technique adopted.
Yahaya, Osemene and Salman (2011) conducted a study on improving the accounting
practices adopted by owners of small and medium scale enterprises in Kwara State Nigeria. The
objective of the study was set to obtain a broad view of the accounting practices being employed
by SMEs in KwaraState The researchers adopted a descriptive research design and collected
their data using questionnaire. The data collected from entrepreneurs in the state through
sampling was analyzed using mean and standard deviation while the hypothesis was tested using
t- test at 0.05 level of significance. The study discovered that majority of the SMEs owners in
Kwara state do not follow proper accounting procedure and recommended among other things
that SME owners should always prepare cashbook, trading, profit and loss account and balance
sheet. The study under review is related to the present study in their design of study adopted,
methods of their data collection and analysis and in their topic content. The studies also differed
in their population, objectives of their studies and in their areas of study.
56
Summary of Literature Reviewed
The concept of entrepreneurship, financial accounting, skill, accounting teachers, senior
secondary school and related empirical studies were reviewed in this study and the review
revealed that entrepreneurship is the major driver for economic growth and development in the
developed and developing nations and that many entrepreneurship businesses collapses within a
short period of their establishment because of lack of proper financial accounting skills.
Also, Need Achievement and Risk Taking theories were reviewed. The need achievement
theory stipulated that the increase in the average need of the society will motivate the youths
towards scanning for wasting potentials around them and tap them while the risk taking theory
presents the entrepreneur as a risk taker whom financial accounting will help to always calculate
the cost of his risk and undertake the most profitable ones. All the empirical studies reviewed
showed that the studies were to either ascertain the accounting practices by SMEs or the role of
record keeping in the survival of small and medium scale enterprises. None was carried out to
actually determine the financial accounting skills that are actually required for entrepreneurship
development which is the gap this study is set to fill, thus the need for this study.
57
CHAPTER THREE
METHODOLOGY
This chapter describes the procedure employed in this study under the following sub-
heading: design of the study, area of the study, population for the study. Sample and sampling
technique, 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 descriptive survey research design will be adopted for the study. Osuala (2004)
described descriptive survey design as a method used to obtain vital facts about people; their
beliefs, opinions, attitudes and behavior. This design is most appropriate and suitable to this
study as it will enable the researcher together the opinions of accounting lecturers and accounting
teachers on the basic financial accounting skills required for entrepreneurship development of
senior secondary school students using questionnaire.
Area of Study
The area of this study is Anambra state which is in the eastern part of Nigeria. It is one of
the largest commercial states in Nigeria that inhabits the largest market in West Africa in Onitsha
and another fast growing market in Nnewi .Therefore Anambra state is chosen for this study
because of the fast growth of small and medium scale businesses in the state.
Population for the Study
The population for the study is two hundred and seven respondents. This comprised of
118accounting teachers in the government owned secondary schools in Anambra state and 89
accounting lecturers in public higher institutions in the state of study (See Appendix A). The
sources of the population information are offices of the head of the departments of the various
57
58
higher institutions in Anambra State and statistic department of Anambra State ministry of
education respectively. This population is chosen by the researcher because accounting teachers
in secondary schools are knowledgeable in financial accounting and deals directly with the
students. Also, the accounting lecturers in the higher institutions train the secondary school
teachers and have the knowledge of the purpose of the study.
Sample and Sampling Technique
The population of this study is of manageable size and so no sampling technique will be
employed by the researcher. The entire population will therefore be studied.
Instrument for Data Collection
The instrument that will be used for the collection of data for this study is structured
questionnaire titled “Basic Financial Accounting Skills Required for Entrepreneurship
Development” (BFASRFED). It will be used to discover the opinion of the respondents on the
basic financial accounting skills required by senior secondary schools students. The
questionnaires contained a list of 65 skilled items grouped into eight clusters section A - G.
Section A was designed to obtain background information about the respondents. This
section contained two questionnaire items with options and blank spaces that would enable the
respondents to tick as appropriate. Section B addressed research question one with items 1-10.
This section was used to determine the prime book entry skills required by senior secondary
students for entrepreneurship. Section C dealt with research question two with items 11-20. This
section was used to determine the opinions of the respondents on the cash book entry skills
required for entrepreneurship development by senior secondary students. Section D dealt with
research question three with items 21-30. This section was used to determine the opinions of the
59
respondents on the bank reconciliation statement skills required by senior secondary students for
entrepreneurship life development.
Section E addressedresearchquestion four with items 30-40. This section seeks the
opinions of the respondents on the ledger skills required for entrepreneurship development by
senior secondary students. Section F seeks to obtain the opinions of the respondents on the
trading, profit and loss skills which were research question five with items 40-50. Section G
addressed research question six with items 50-60. This section also seeks to determine the
balance sheet skills required for entrepreneurship development of senior secondary students.
The items is sections B, C, D, E, F, and G were structured on a five point scale rating
with response options as: very much required (5), “much required (4)” “ Averagely required (3)”,
“somewhat required (2)” and “not required (1)” were used. Figures in brackets are values of each
response options.
Validation of the Instrument
The instrument was face validated by three experts from the Department ofVocational
Teacher Education, University of Nigeria Nsukka. Suggestions fromvalidates were used to
improve the final draft of the questionnaire. Therefore, the initial 65 items were increased to 75
while the initial sections B to G were reduced to F.
Reliability of the Instrument
Cronbach Alpha method will be used to establish the internal consistency of the
instrument for this study. The instrument will be administered to 20 respondents made of 14
secondary school teachers and 6 accounting lecturers in Enugu state. This is because Enugu state
hasthe same geographical characteristics with the place of the study.
60
Method of Data Collection
The instrument will be administered to the respondents by the researcher with the help of
two trained research assistants who will be briefed on how to guide the respondents to respond to
the questions. Completed copies of the instrument will be collected from the respondents one
week after distribution.
Method of Data Analysis
The collected data will be analyzed using mean ( ) and standard deviation, while the real
limit of numbers will be used in taking decision as follows:
Response Category Points
Very much required 4.50-5.00
Much required 3.50-4.49
Averagely Required 2.50-3.49
Somewhat required 1.50-2.49
Not required 1.00-1.49
From the table above, any response that fall between1.00 to 2.49 will be considered not
required because they are below average. Also, all the responses that falls from 2.50to 5.00 will
be considered to be required. The hypothesis will be tested at 0.05 level of significance using t-
test. Significance levels below 0.05 will be rejected while significance levels at 0.05 and above
will be accepted. However, low standard deviation will show correlation while high standard
deviation will show no correlation in the agreement of the respondents. The total number of 196
questionnaires was recovered out of 207 copies administered and analyzed.
x _
61
CHAPTER FOUR
PRESENTATION AND ANALYSIS OF DATA
This chapter presents the analysis of data collected in the course of the study. The
presentation and analysis is organized in tables and arranged according to research questions and
hypothesis formulated for the study.
Research Question 1
What are the prime book entry skills required for entrepreneurship development by
senior secondary school students of Anambra State?
The data for answering this research question was presented in Table 1.
Table1
Mean and standard deviation of responses of accounting teachers and lecturers perception of the prime book entry skills required for entrepreneurship development by senior secondary school students of Anambra State.
S/N Items statement Χ SD Remark
1. Ability to list the prime books 4.26 0.87 VMR 2. Ability to identify credit transactions 4.39 0.90 VMR 3. Ability to identify items that are entered into the sales day book 4.44 0.79 VMR 4. Ability to post items into the sales day book 4.42 0.66 VMR 5. Ability to transfer the total sales day book to the appropriate side of the sales account 4.15 0.91 VMR 6. Ability to identify items to be entered into the purchases day book 4.29 0.90 VMR 7. Ability to post items into the purchases day book 4.17 0.92 VMR 8. Ability to transfer the total of purchases day book to the appropriate side of the
purchases account 4.22 0.92 VMR
9. Ability to identify items of return inward 4.10 0.92 VMR 10. Ability to post items into the return inward day book 4.00 1.08 MR 11. Ability to transfer return inward total to the appropriate side of the return inward
account 4.12 0.96 VMR
12. Ability to identify items of return outward 4.00 0.96 MR 13. Ability to post items into the return outward day book 4.00 0.96 MR 14. Ability to transfer total of return outward to the appropriate side of the return outward
account 4.10 1.01 VMR
15. Ability to identify items to be posted to the journal proper 4.21 0.96 VMR
16 Ability to identify accounts to be debited or credited in the journal proper 4.28 0.92 VMR 17 Ability to write narrations of entries in the journal proper 4.21 0.96 VMR Cluster Summary 4.20 0.92 MR
Key: VMR =Very Much Required: MR = Much Required; AR = Averagely Required.
61
62
Data presented in Table 1 showed that items 1, 2, 3, 4, 5, 6, 7, 8, 9, 11, 14, 15, 16 and 17
had their means ranging from 4.10 to 4.44 while items 10, 12 and 13 had 4.00 as their mean
range. These mean ratings are above the cut-off point of 2.50 and therefore considered as being
very much required and required respectively for entrepreneurship development by senior
secondary school leavers in Anambra State. Also the data showed low standard deviation which
ranges from 4.66 to 1.08. This indicated that the response of accounting lecturers are closely
related to the mean response of accounting teachers on the prime book entry skills required for
entrepreneurship development by senior secondary school students in Anambra State.
Research Question 2
What are the cash book entry skills required for entrepreneurship development by
senior secondary school students of Anambra State?
The data for answering this research question was presented in Table 2.
63
Table2
Mean and standard deviation of responses of accounting teachers and lecturers perception on the cash book entry skills required for entrepreneurship development by senior secondary school students of Anambra State.
S/N Items statement Χ SD Remark
1 Ability to draw up a cash book columns 4.47 0.75 VMR
2 Ability to identify cash transactions 4.57 .77 VMR
3 Ability to identify the debit and credit entries of the cash book 4.57 .74 VMR
4 Ability to identify credit and debit balances in the cash book 4.43 .78 VMR
5 Ability to identify kinds of cash book 4.13 .88 VMR
6 Ability to post items into the cash book 4.15 .99 VMR
7 Ability to make a contra entry in the both debit and credit sides of
the cash book
4.22 1.03 VMR
8 Ability to calculate and deduct cash discounts in the cash book 4.30 .86 VMR
9 Ability to post and cast items in the cash book correctly 4.23 .99 VMR
10 Ability to balance the cash book 4.53 .67 VMR
Cluster Summary 4.36 0.85 VMR
Key: VMR =Very Much Required: MR = Much Required; AR = Averagely Required
Data presented in Table 2 showed that items 1, 2, 3, 4, 5, 6, 7, 8, 9 and 10 had their
means ranging from 4.13 to 4.57 which is above the cut-off point of 2.50 and thus be considered
as being very much required for entrepreneurship development by senior secondary school (111)
leavers in Anambra State. Also the data showed a low standard deviation that ranges from 0.67
to 1.03. This also indicated the response of accounting lecturers are closely related to the mean
responses of accounting teachers on the cash book skills required for entrepreneurship
development by senior secondary school students in Anambra State.
64
Research Question 3
What are the bank reconciliation statement skills required for entrepreneurship
development by senior secondary school students of Anambra State?
The data for answering this research question was presented in Table 3
Table3
Mean and standard deviation of responses of accounting teachers and lecturers perception on the bank reconciliation statement skills required for entrepreneurship development by senior secondary school students of Anambra State.
S/N Items statement Χ SD Remark
1 Ability to identify items that cause discrepancy between cash book
and bank statement
4.48 .77 VMR
2 Ability to adjust the cash book balance 4.46 .81 VMR
3 Ability to identify unpresentedcheques 4.22 .99 VMR
4 Ability to identify uncreditedcheques 4.33 .92 VMR
5 Ability to identify errors in the cash book 4.39 .87 VMR
6 Ability to identify errors in the bank statement 4.41 .81 VMR
7 Ability to prepare the bank reconciliation statement 4.33 .91 VMR
8 Ability to balance the adjusted cash book 4.25 .92 VMR
9 Ability to reconcile the cash book and the bank statement using
the identified items that cause the error
4.18 1.02 VMR
10 Ability to write up bank statement and cash book at the same date 4.25 .95 VMR
11 Ability to identify the items to be added or deducted from the
adjusted cash book
4.42 .78 VMR
Cluster Summary 4.34 0.87 VMR
Key: VMR =Very Much Required: MR = Much Required; AR = Averagely Required
65
Data presented in Table 3 showed that items 1, 2, 3, 4, 5, 6, 7, 8, 9, 10 and 11 had their means
ranging from 4.18 to 4.48 which is above the cut-off point of 2.50 and therefore considered as
being very much required for entrepreneurship development by senior secondary school (111)
students in Anambra State. Also the data showed a low standard deviation ranging from 0.77 to
1.02, which also indicated that correlation existed between the response of accounting teachers
and accounting lecturers on the bank reconciliation skills required for entrepreneurship
development by senior secondary school students
Research Question 4
What are the ledger skills required for entrepreneurship development by senior
secondary school students of Anambra State?
The data for this answering research question was presented in Table 4.
Table4
Mean and standard deviation of responses of accounting teachers and lecturers perception of the ledger skills required for entrepreneurship development by senior secondary school students of Anambra State.
S/N Items statement Χ SD Remark 1 Ability to identify personal accounts 4.45 .74 VMR 2 Ability to adjust the cash book balance 4.23 .92 VMR 3 Ability to post transactions into different classes of account correctly 4.38 .76 VMR 4 Ability to balance each account correctly 4.37 .86 VMR 5 Ability to transfer the balance of each account to the trial balance 4.28 .83 VMR 6 Ability to observe the double entry principle in the ledger 4.29 .98 VMR 7 Ability to draw the trial balance for ledger account 4.35 .78 VMR 8 Ability to identify the giver and receiver of values in each transactions 4.24 .96 VMR 9 Ability to draw up a trial balance 4.39 .84 VMR 10 Ability to transfer balances from different ledger account into the trial balance 4.18 .95 VMR 11 Ability to identify errors that affect the trial balance 4.18 .97 VMR 12 Ability to identify errors that does not affect the trial balance 4.10 1.10 VMR 13 Ability to correct errors 4.00 1.11 VMR 14 Ability to transfer errors not identified to the suspense account 4.10 .91 VMR 15 Ability to add up the totals of the trial balance 4.17 .91 VMR 16 Ability to identify accounts with debit balances 4.11 1.02 VMR 17 Ability to identify accounts with credit balances 4.18 1.00 VMR 18 Ability to title the trial balance 4.27 .95 VMR Cluster Summary 4.24 0.87 VMR
Key: VMR =Very Much Required: MR = Much Required; AR = Averagely Required
66
Data presented in Table 4 showed that items 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15,
16, 17 and 18 had their means ranging from 4.10 to 4.45 which is above the cut-off point of 2.50
and therefore considered as being very much required for entrepreneurship development by
senior secondary school (111) students in Anambra State. The data also showed correlation in
the responses of the respondents on the ledger skills required for entrepreneurship development
by senior secondary schools evidenced in low standard deviation of the range 0.74 to 1.11.
Research Question 5
What are the trading, profit and loss account skills required for entrepreneurship
development by senior secondary school students of Anambra State?
The data for answering this research question was presented in Table 5.
Table5
Mean and standard deviation of responses of accounting teachers and lecturers perception on the trading, profit and loss account skills required for entrepreneurship development by senior secondary school students of Anambra State.
S/N Items statement Χ SD Remark
1 Ability to identify items that make up trading account 4.54 .62 VMR 2 Ability to prepare a trading account to determine cost of goods sold 4.62 .61 VMR 3 Ability to obtain the gross profit or loss in trading account 4.52 .66 VMR 4 Ability to identify expenses associated with profit and loss account 4.49 .75 VMR 5 Ability to identify the business incomes and add them to the gross profit correctly 4.40 .87 VMR 6 Ability to transfer gross profit from trading account to the profit and loss account 4.32 .87 VMR 7 Ability to add provisions to the sides of profit and loss account correctly 4.41 .76 VMR 8 Ability to obtain the net profit or loss in profit and loss account 4.34 .73 VMR 9 Ability to cast out the items in trading, profit and loss account correctly 4.36 .70 VMR
10 Ability to calculate goods available for sale in the trading account 4.32 .89 VMR 11 Ability to deduct expenses in the profit and loss account 4.49 .79 VMR
Cluster Summary 4.44 0.67 VMR
Key: VMR =Very Much Required: MR = Much Required; AR = Averagely Required
67
Data presented in Table 5 showed that items 1, 2, 3, 4, 5, 6, 7, 8, 9, 10 and had their
means ranging from 4.32 to 4.62 which is above the cut-off point of 2.50 and therefore
considered as being very much required. Also the data showed a low standard deviation which
ranges from 0.61 to 0.89. This also indicated that the response of accounting lecturers are closely
related to responses of accounting teachers on trading, profit and loss account skills required for
entrepreneurship development by senior secondary school students in Anambra State.
Research Question 6
What are the balance sheet skills required for entrepreneurship development by senior
secondary school students of Anambra State?
The data for answering this research question was presented in Table 6.
Table6
Mean and standard deviation of responses of accounting teachers and lecturers perception on the balance sheet skills required for entrepreneurship development by senior secondary school students of Anambra State.
S/N Items statement Χ SD Remark
1 Ability to differentiate between assets and liabilities 4.62 .74 VMR
2 Ability to identify different types of assets and liabilities 4.39 .80 VMR
3 Ability to transfer net profit from the profit and loss account to the balance sheet 4.40 .67 VMR
4 Ability to calculate and deduct depreciations from fixed assests 4.21 .93 VMR
5 Ability to name the balance sheet appropriately 4.30 .88 VMR
6 Ability to prepare the balance sheet for internal use and for publication 4.13 1.09 VMR
7 Ability to enter the balance sheet items orderly 4.24 .84 VMR
8 Ability to balance up the balance sheet 4.41 .87 VMR
Cluster Summary 4.44 0.67 VMR
Key: VMR =Very Much Required: MR = Much Required; AR = Averagely Required
68
Data presented in Table 6 showed that items 1, 2, 3, 4, 5, 6, 7 and 8 had their means
ranging from 4.13 to 4.62 which is above the cut-off point of 2.50 and therefore considered as
being very much required. Also the data showed that the relatedness of the responses of
accounting teachers and accounting lecturers on balance sheet skills required for
entrepreneurship development by senior secondary school students in Anambra State are very
close evidenced in low standard deviation of 0.67 to 1.09.
H01: There is no significant difference in the mean ratings of accounting lecturers and
accounting teachers on the prime book entry skills required for entrepreneurship
development by senior secondary school (111) students in Anambra State.
The data for testing this hypothesis was presented in table7.
69
Table7
t-test analysis of the responses of the accounting lecturers and accounting teachers’ on their perception on the prime book entry skills required for entrepreneurship development by senior secondary school (111) students in Anambra State.
S/N Items statement 1Χ
S1I
2Χ S1
2 Df t-value P-value Rmk
1. Ability to list the prime books 4.36 .86 4.17 .88 194 1.59 .12 NS
2. Ability to identify credit transactions 4.43 0.90 4.34 .92 194 .55 .58 NS
3. Ability to identify items that are entered into the sales day
book
4.49 0.72 4.40 .84 194 .75 .45 NS
4. Ability to post items into the sales day book 4.52 0..57 4.34 .71 194 1.87 .06 NS
5. Ability to transfer the total sales day book to the appropriate
side of the sales account
4.26 0.90 4.06 .90 194 .1.53 .13 NS
6. Ability to identify items to be entered into the purchases day
book
4.35 0. 90 4.25 .91 194 .74 .46 NS
7. Ability to post items into the purchases day book 4.35 0.72 4.23 .80 194 .78 .44 NS
8. Ability to transfer the total of purchases day book to the
appropriate side of the purchases account
4.19 0.95 4.16 .90 194 .22 .82 NS
9. Ability to identify items of return inward 4.30 0.93 4.16 .91 194 1.04 .30 NS
10. Ability to post items into the return inward day book 4.21 0.91 4.02 .93 194 1.48 .14 NS
11. Ability to transfer return inward total to the appropriate side
of the return inward account
4.12 1.10 3.38 1.07 194 1.80 .07 NS
12. Ability to identify items of return outward 4.21 1.00 4.05 .93 194 1.16 .25 NS
13. Ability to post items into the return outward day book 4.10 0.95 3.87 .96 194 1.66 .10 NS
14. Ability to transfer total of return outward to the appropriate
side of the return outward account
4.07 0.90 3.93 1.00 194 .97 .33 NS
15. Ability to identify items to be posted to the journal proper 4.23 0.94 4.00 1.05 194 1.56 .12 NS
16. Ability to identify accounts to be debited or credited in the
journal proper
4.35 0.94 4.32 .90 194 .86 .40 NS
17. Ability to write narrations of entries in the journal proper 4.26 0.92 4.17 .99 194 .67 .51 NS
Cluster Summary 4.28 0.80 4.11 0.92 1.04 0.31 NS
Key: NS = Not Significant; S= Significant: t cal =calculated value of t-test SPSS; SD1= Standard deviation of Accounting Lecturers; X1= Mean of Accounting Lecturers; SD2= Standard Deviation of Accounting Teachers; X2 = Mean of Accounting teachers; N1= Number of Accounting Lecturers; N2= Number of Accounting teachers; P>= 0.05 Level of Sig.
The Table 7 shows that item 1-17 have their calculated probability (Sig. 2 tailed) values
to be 0.12, 0.58, 0.45, 0.06, 0.13, 0.46, 0.44, 0.82, 0.30, 0.14, 0.07, 0.25, 0.10, 0.33, 0.12, 0.40
and 0.51 respectively and tested at 194 degree of freedom. Since these values are greater than
70
0.05 level of significance, that the null hypothesis was accepted as postulated. Therefore there is
no significant difference in the responses of the accounting lecturers and teachers on the items.
The low standard deviation seen on the mean responses of the accounting lecturers and teachers
which ranges from 0.57 to 0.71 and 0.71 and 1.07 respectively indicated that the opinions of the
respondents on the hypothesis stated on the prime book entry skills are closely related. This
validates the findings of no significant difference on hypothesis one.
H02: There is no significant difference in the mean ratings of accounting lecturers and
accounting teachers on the cash book entry skills required for entrepreneurship
development by senior secondary school (111) students in Anambra State.
The data for testing this hypothesis two was presented in table8.
Table 8 t-test analysis of the responses of the accounting lecturers and accounting teachers’ on their perception on the cash book entry skills required for entrepreneurship development by senior secondary school (111) students in Anambra State.
S/N Items statement 1Χ
S1I
2Χ S1
2 Df t-value P-value Rmk
1 Ability to draw up a cash book columns 4.43 0.78 4.50 0.74 194 -.66 .51 NS
2 Ability to identify cash transactions 4.54 0.80 4.59 0.75 194 -.48 .63 NS
3 Ability to identify the debit and credit entries of the cash book 4.57 0.73 4.56 0.76 194 .08 .93 NS
4 Ability to identify credit and debit balances in the cash book 4.40 0.75 4.45 0.80 194 -.37 .71 NS
5 Ability to identify kinds of cash book 4.14 0.95 4.15 0.84 194 -.07 .94 NS
6 Ability to post items into the cash book 4.19 0.95 4.13 1.01 194 .46 .65 NS
7 Ability to make a contra entry in the both debit and credit sides
of the cash book
4.23 1.06 4.21 1.01 194 .08 .94 NS
8 Ability to calculate and deduct cash discounts in the cash book 4.31 0.99 4.29 0.82 194 .12 .91 NS
9 Ability to post and cast items in the cash book correctly 4.24 1.01 4.23 0.97 194 .04 .97 NS
10 Ability to balance the cash book 4.56 0.68 4.51 0.67 194 .52 .61 NS
Cluster Summary 4.36 0.87 4.36 0.84 -0.03 0.78 NS
Key: NS = Not Significant; S= Significant: t cal =calculated value of t-test SPSS; SD1= Standard deviation of Accounting Lecturers; X1= Mean of Accounting Lecturers; SD2= Standard Deviation of Accounting Teachers; X2 = Mean of Accounting teachers; N1= Number of Accounting Lecturers; N2= Number of Accounting teachers; P>= 0.05 Level of Sig.
71
The Table 8 shows that item 1-10 have their calculated probability (Sig. 2 tailed) values
to be0.51, 0.63, 0.93, 0.71, 0.94, 0.65, 0.94, 0.91, 0.97and 0.61 respectively and tested at 194
degree of freedom. Since these values are greater than 0.05 level of significance, that the null
hypothesis was accepted as postulated there is no significant difference in the responses of the
accounting lecturers and teachers on the items. Also low standard deviation range of 0.68 to 1.06
for accounting lecturers and 0.67 to 1.01 for accounting teachers shown in the table showed
correlation in the mean responses of the respondents on hypothesis two. This also validates the
finding on hypothesis two.
H03: There is no significant difference in the mean ratings of accounting lecturers and accounting teachers on the bank reconciliation skills required for entrepreneurship development by senior secondary school (111) students in Anambra State.
The data for testing this hypothesis was presented in table 9.
Table 9
[t-test analysis of the responses of the accounting lecturers and accounting teachers’ on their perception on the bank reconciliation skills required for entrepreneurship development by senior secondary school 3 students in Anambra State.
S/N Items statement 1Χ
S1I
2Χ S1
2 Df t-value P-value Rmk
1. Ability to identify items that cause discrepancy between cash
book and bank statement
4.52 0.78 4.45 .76 194 .70 .49 NS
2. Ability to adjust the cash book balance 4.45 0.84 4.46 .79 194 .10 .92 NS
3. Ability to identify unpresentedcheques 4.29 0.96 4.18 1.02 194 .75 .46 NS
4. Ability to identify unaccredited cheques 4.42 0.85 4.27 .96 194 1.13 .26 NS
5. Ability to identify errors in the cash book 4.40 0.81 4.37 .91 194 .24 .81 NS
6. Ability to identify errors in the bank statement 4.49 0.75 4.36 .85 194 1.12 .26 NS
7. Ability to prepare the bank reconciliation statement 4.33 0.91 4.32 .92 194 .90 .93 NS
8. Ability to balance the adjusted cash book 4.27 0.91 4.23 .93 194 .31 .75 NS
9. Ability to reconcile the cash book and the bank statement using
the identified items that cause the error
4.23 0.96 4.13 1.07 194 .70 .48 NS
10. Ability to write up bank statement and cash book at the same date 4.32 0.87 4.20 1.01 194 .91 .36 NS
11. Ability to identify the items to be added or deducted from the
adjusted cash book
4.44 0.73 4.41 .81 194 .27 .79 NS
Cluster Summary 4.38 0.85 4.31 0.91 0.63 0.59 NS
Key: NS = Not Significant; S= Significant: t cal =calculated value of t-test SPSS; SD1= Standard deviation of Accounting Lecturers; X1= Mean of Accounting Lecturers; SD2= Standard Deviation of Accounting Teachers; X2 = Mean of Accounting teachers; N1= Number of Accounting Lecturers; N2= Number of Accounting teachers; P>= 0.05 Level of Sig.
72
The Table 9 shows that item 1-11 have their calculated probability (Sig. 2 tailed) values
to be 0.45, 0.92, 0.46, 0.26, 0.81, 0.26, 0.93, 0.75, 0.48, 0.36 and 0.79 respectively and tested at
194 degree of freedom. Since these values are greater than 0.05 level of significance, that the
null hypothesis was accepted as postulated that there is no significant difference in the responses
of the accounting lecturers and teachers on the items. The low standard deviation seen on the
mean responses of accounting lecturers and accounting teachers which ranges from 0.73 to 0.96
and 0.76 to 1.07 respectively indicated that the opinions of the respondents on hypothesis three
are closely related and also validates the findings of the stated hypothesis.
H04: There is no significant difference in the mean ratings of accounting lecturers and
accounting teachers on the ledger skills required for entrepreneurship development by senior
secondary school (111) students in Anambra State.
The data for testing this hypothesis was presented in table 10.
73
Table 10 t-test analysis of the responses of the accounting lecturers and accounting teachers’ on their perception on the ledger skills required for entrepreneurship development by senior secondary school(111) students in Anambra State.
S/N Items statement 1Χ
S1I
2Χ S1
2 Df t-value P-value
Rmk
1 Ability to identify personal accounts 4.51 0.69 4.41 .78 194 .948 .34 NS
2 Ability to adjust the cash book balance 4.30 0.89 4.18 .94 194 .90 .37 NS
3 Ability to post transactions into different classes of account correctly
4.44 0.72 4.33 .79 194 1.01 .32 NS
4 Ability to balance each account correctly 4.39 0.90 4.38 .86 194 -.14 .89 NS
5 Ability to transfer the balance of each account to the trial balance
4.27 0.84 4.29 .82 194 -.10 .92 NS
6 Ability to observe the double entry principle in the ledger 4.33 0.78 4.36 .78 194 -.36 .72 NS
7 Ability to draw the trial balance for ledger account 4.31 0.97 4.20 .96 194 -.21 .83 NS
8 Ability to identify the giver and receiver of values in each transactions
4.43 0.97 4.34 .89 194 .81 .42 NS
9 Ability to draw up a trial balance 4.43 0.78 4.36 .89 194 .59 .56 NS
10 Ability to transfer balances from different ledger account into the trial balance
4.27 0.88 4.11 .99 194 1.22 .22 NS
11 Ability to identify errors that affect the trial balance 4.31 0.76 4.09 1.09 194 1.58 .12 NS
12 Ability to identify errors that does not affect the trial balance
4.24 0.93 4.00 1.20 194 1.51 .13 NS
13 Ability to correct errors 4.13 1.05 3.89 1.15 194 1.49 .14 NS
14 Ability to transfer errors not identified to the suspense account
4.23 0.80 4.01 .97 194 1.67 .10 NS
15 Ability to add up the totals of the trial balance 4.23 0.94 4.13 .90 194 .70 .49 NS
16 Ability to identify accounts with debit balances 4.11 1.05 4.11 1.01 194 .00 1.00 NS
17 Ability to identify accounts with credit balances 4.25 0.98 4.13 1.01 194 .87 .39 NS
18 Ability to title the trial balance 4.38 0.82 4.19 1.03 194 1.33 .89 NS
Cluster Summary 4.31 0.88 4.20 0.95 0.77 0.49 NS
Key: NS = Not Significant; S= Significant: t cal =calculated value of t-test SPSS; SD1= Standard deviation of Accounting Lecturers; X1= Mean of Accounting Lecturers; SD2= Standard Deviation of Accounting Teachers; X2 = Mean of Accounting teachers; N1= Number of Accounting Lecturers; N2= Number of Accounting teachers; P>= 0.05 Level of Sig.
74
The Table 10 shows that item 1-18 have their calculated probability (Sig. 2 tailed) values
to be 0.34, 0.37, 0.32, 0.89, 0.92, 0.72, 0.83, 0.42, 0.56, 0.22, 0.12, 0.13, 0.14, 0.10, 0.49, 1.00,
0.39 and 0.89 respectively and tested at 194 degree freedom. Since these values are greater than
0.05 level of significance, that the null hypothesis was accepted as postulated, that there is no
significant difference in the responses of the accounting lecturers and teachers on the items. The
low standard deviation shown with the range 0.69 to 1.05 and 0.78 to 1.20 on the opinions of
accounting lecturers and accounting teachers respectively indicated correlation in the mean
responses of the respondents on hypothesis four and also supports the findings that there is no
significant difference in the stated hypothesis.
H05: There is no significant difference in the mean ratings of accounting lecturers and accounting teachers on the trading, profit and loss account skills required for entrepreneurship development by senior secondary school (111) students in Anambra State.
The data for testing this hypothesis was presented in table 11.
Table 11 t-test analysis of the responses of the accounting lecturers and accounting teachers’ on their perception on the trading, profit and loss account skills required for entrepreneurship development by senior secondary school (111) students in Anambra State. S/N Items statement S1
I 2Χ
S12 Df t-value P-
value Rmk
1 Ability to identify items that make up trading account 4.54 0.65 4.54 .60 194 0.13 .90 NS 2 Ability to prepare a trading account to determine cost of goods sold 4.63 0.58 4.62 .63 194 .17 .87 NS
3 Ability to obtain the gross profit or loss in trading account 4.50 0.67 4.53 .66 194 .28 .78 NS 4 Ability to identify expenses associated with profit and loss account 4.50 0.72 4.48 .77 194 .17 .87 NS 5 Ability to identify the business incomes and add them to the gross
profit correctly 4.43 0.87 4.38 .87 194 .36 .72 NS
6 Ability to transfer gross profit from trading account to the profit and loss account
4.37 0.79 4.28 .93 194 .73 .47 NS
7 Ability to add provisions to the sides of profit and loss account correctly
4.46 0.68 4.37 .82 194 .89 .37 NS
8 Ability to obtain the net profit or loss in profit and loss account 4.34 0.70 4.34 .75 194 .06 .96 NS
9 Ability to cast out the items in trading, profit and loss account correctly 4.39 0.73 4.33 .68 194 .62 .54 NS 10 Ability to calculate goods available for sale in the trading account 4.30 0.90 4.34 .90 194 .32 .75 NS 11 Ability to deduct expenses in the profit and loss account 4.50 0.72 4.48 .77 194 .17 .87 NS
Cluster Summary 4 4.45 0.73 4.43 0.76 0.25 0.74 NS Key: NS = Not Significant; S= Significant: t cal =calculated value of t-test SPSS; SD1= Standard deviation of Accounting Lecturers; X1= Mean of Accounting Lecturers; SD2= Standard Deviation of Accounting Teachers; X2 = Mean of Accounting teachers; N1= Number of Accounting Lecturers; N2= Number of Accounting teachers; P>= 0.05 Level of Sig.
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The Table 11 shows that item 1-11 have their calculated probability (Sig. 2 tailed) values
to be 0.90, 0.87, 0.78, 0.87, 0.72, 0.47, 0.37, 0.96, 0.54, 0.75 and 0.87 respectively and tested at
194 degree of freedom. Since these values are greater than 0.05 level of significance, that the
null hypothesis was accepted as postulated that there is no significant difference in the responses
of the accounting lecturers and teachers on the items. The standard deviation range of 0.58 to
0.90 and 0.60 to 0.93 in respect to accounting lecturers and accounting teachers respectively are
low and indicated the relatedness of the opinions of the respondents on hypothesis five. This also
validates the findings the stated hypothesis five.
H06: There is no significant difference in the mean ratings of accounting lecturers and accounting teachers on the balance sheet skills required for entrepreneurship development by senior secondary school (111) students in Anambra State. The data for testing this hypothesis was presented in table 12.
Table 12
t-test analysis of the responses of the accounting lecturers and accounting teachers on their perception on the balance sheet skills required for entrepreneurship development by senior secondary school (111) students in Anambra State.
S/N Items statement 1Χ
S1I
2Χ
S12 Df t-value P-value Rmk
1 Ability to differentiate between assets and liabilities 4.57 0.76 4.65 .72 194 .75 .45 NS
2 Ability to identify different types of assets and liabilities 4.42 0.79 4.36 .81 194 .51 .61 NS
3 Ability to transfer net profit from the profit and loss
account to the balance sheet
4.53 0.63 4.30 .68 194 2.31 .02 S
4 Ability to calculate and deduct depreciations from fixed
assests
4.37 0.83 4.10 .99 194 2.03 .04 S
5 Ability to name the balance sheet appropriately 4.32 0.82 4.28 .92 194 0.35 .73 NS
6 Ability to prepare the balance sheet for internal use and
for publication
4.27 1.00 4.02 1.14 194 1.64 .10 NS
7 Ability to enter the balance sheet items orderly 4.40 0.70 4.12 .92 194 2.41 .02 S
8 Ability to balance up the balance sheet 4.51 0.75 4.33 .94 194 1.45 .15 NS
Cluster Summary 4.42 0.79 4.27 0.89 1.24 0.27 NS
Key: NS = Not Significant; S= Significant: t cal =calculated value of t-test SPSS; SD1= Standard deviation of Accounting Lecturers; X1= Mean of Accounting Lecturers; SD2= Standard Deviation of Accounting Teachers; X2 = Mean of Accounting teachers; N1= Number of Accounting Lecturers; N2= Number of Accounting teachers; P>= 0.05 Level of Sig.
76
The Table 12 shows that item 1, 2, 5, 6, and 8 have their calculated probability (Sig. 2
tailed) values to be 0.45, 0.61, 0.73, 0.10 and 0.15 respectively and tested at 194 degree of
freedom. Since these values are greater than 0.05 level of significance, the null hypothesis was
accepted as postulated that there is no significant difference in the responses of the accounting
lecturers and teachers on the items. However, items 3, 4, and 7 have their calculated probability
values to be 0.02, 0.04 and 0.02 respectively. With these values being less than 0.05 significance
level indicate that there is significant difference in the responses of accounting lecturers and
accounting teachers on the items. Therefore, the hypothesis of no significant difference for H06
was rejected. The low standard deviation as seen in the table above showed that the opinions of
the respondents on hypothesis six are correlated and also validates the findings.
Findings of the Study
The following findings emerged from the study with respect to the research questions and
hypothesis tested.
1. The prime book entry skills required for entrepreneurship development were perceived as
very much required by senior secondary school leavers. These skills includes: ability to
identify items to be posted to each prime books, ability to post those items identified into
the respective prime books and ability to transfer the totals in the prime books to the
appropriate side of the account.
2. Possessing cash book entry skills so as to be able to identify cash transactions, identify
debit and credit entries of the cash book, post items as well as balance the cash book are
essential skills required for entrepreneurship development by senior secondary school
leavers.
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3. Having the ability to reconcile bank statements and cash books is an essential skill that is
required for entrepreneurship development so as to check fraudulent attitudes between
the entrepreneurs and their customers.
4. Ledger entry skills perceived as very essential skills for entrepreneurship development by
senior secondary school students includes: ability to identify and post transactions into
different classes of account, ability to observe the double entry principle as well as the
ability to identify the giver and receiver of values in every transaction.
5. Having trading, profit and loss account skills have been perceived to be an essential skill
required for entrepreneurship development by senior secondary school students. These
skills includes: ability to prepare trading account to determine cost of goods sold and
goods available for sale, ability to obtain gross profit or loss, ability to obtain net profit or
loss in the profit and loss account and ability to identify and deduct expenses charged to
trading, profit and loss accounts respectively.
6. Possessing balance sheet skills has been perceived as very much required skill for
entrepreneurship development by senior secondary school so as to be able to identify
items of assets and liabilities and ability to prepare a balance sheet for internal use and for
publication.
7. It was found that there was no significant difference in the mean responses of accounting
lecturers and teachers on the prime book entry skills required for entrepreneurship
development by senior secondary school (111) students in Anambra State.
8. It was found that there was no significant difference in the mean responses of accounting
lecturers and teachers on the cash book entry skills required for entrepreneurship
development by senior secondary school (111) students in Anambra State.
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9. It was found that there was no significant difference in the mean responses of accounting
lecturers and teachers on the bank reconciliation skills required for entrepreneurship
development by senior secondary school (111) students in Anambra State.
10. It was found that there was no significant difference in the mean responses of accounting
lecturers and teachers on the ledger entry skills required for entrepreneurship
development by senior secondary school (111) students in Anambra State.
11. It was found that there was no significant difference in the mean responses of accounting
lecturers and teachers on the trading, profit and loss account skills required for
entrepreneurship development by senior secondary school (111) students in Anambra
State.
12. It was found that there was no significant difference in the mean responses of accounting
lecturers and accounting teachers on 5 items on the balance sheet skills required for
entrepreneurship development by senior secondary school (111) students in Anambra
State.
Discussion of the findings
The findings of the study were organized and discussed according to the research
questions answered and null hypothesis tested.
A. Basic financial accounting skills with regards to prime book entry skill required for
entrepreneurship development.
The data presented in the Table 1 provided answers to research question one. The
findings revealed that senior secondary school leavers (prospective entrepreneurs) requires prime
books entry skills for them to be able to establish, grow and manage their own businesses well
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for greater development. The essential prime books skills as revealed by the findings of this
study are: ability to identify prime books, post items into the books and ability to transfer totals
of these books to the appropriate side of the account in the ledger. Also, the result of H01 in Table
7 indicated comparison of the respondents (accounting lecturers and accounting teachers) on the
prime book entry skills required for entrepreneurship development by senior secondary school
students (111) in Anambra State tested with t-test statistics at 0.05 level of significant and at 194
degree of freedom. The findings indicated that all the seventeen items of prime book entry skills
were accepted by the respondents as being essential skills required for entrepreneurship
development by senior secondary school leavers. This is based on the result of the calculated
grand mean and p-value of all the items of the cluster which were greater than 2.50 and 0.05
respectively. Therefore, it could be deducted that there is no significant difference in the mean
responses of accounting lecturers and accounting teachers on the prime book entry skills required
for entrepreneurship development by senior secondary school leavers. The implication of these
findings was that it helps to confirm the findings made in research question one. These findings
are in consonant with the findings of Abdulrasheed et al (2012) who identified purchases day
book, cash book and ledger as the most required financial record books that must be kept by
small and medium scale businesses and stated that keeping of these books helps to improve the
accuracy and reliability of the accounting transactions which further provides the input to
financial statement for small enterprises. Possessing these skills introduces the secondary school
leavers to the basic financial books to be kept that will assist in the development of their
businesses even though majority of small and medium scale enterprises in Nigeria do not keep
proper financial re cords of their transactions. This is also the view ofAdemola et al (2012) who
80
discovered that owners of small and medium enterprises in Kogi do not keep records of their
transactions which deters them from determining the growth of their businesses.
B. Basic financial accounting skills required by senior secondary school leavers with
regards to cash book entry skills for entrepreneurship development.
The data presented in Table 2 provided answers to research question two. The findings
revealed that senior secondary school (111) leavers requires cash book entry skills for them to be
able to control cash inflow and outflow of their businesses. Cash is the basic unit needed to keep
businesses running on a continuous basis and is also the ultimate output expected to be realized
in any business. Cash flows in and out of businesses on the daily basis and must be properly
recorded to avoid overstatement or understatement of customers account. The result of H02
formulated on the cash book entry skills required for entrepreneurship development by senior
secondary school leavers is presented in Table 8 also. The calculated grand mean and p-value for
all the ten items of the cluster were greater than 2.50 and 0.05 respectively. Therefore, the null
hypothesis was upheld at 0.05 level of significant. On these items, it was noted that accounting
teachers and accounting lecturers agreed on the cash book skills required for entrepreneurship
development by senior secondary school leavers in Anambra State. The implication of this result
was that it helped to confirm the findings made on research question two. The findings of this
study connotes with the view of Morthi (2001) who noted that introducing a fair system for
recording business cash transactions enable owners of businesses exercise control over inflow
and out flow of funds for greater expansion of their businesses. Furthermore, the findings on the
essentiality of cash book entry skills aligns with the view of Brigham in Ali (2001) who stated
that cash is the oil that lubricates the wheel of any business and use of proper record keeping.
81
C. Basic financial accounting skills required by senior secondary school leavers with
regards to bank reconciliation skills for entrepreneurship development.
The data presented in Table 3 provided answers to research question three. The findings
revealed that ability to reconcile the cash book and bank statement of any business helps the
entrepreneur to guard against fraudulent attitudes that may hinder the growth of any business.
The result of t-test significant used to test H03 on the bank reconciliation skills required for
entrepreneurship development by senior secondary school leavers was presented in Table 9. The
calculated grand mean and p-value of all the eleven items of the cluster had their values greater
than 2.50 and 0.05 respectively. Hence the null hypothesis was accepted not having significant
different between the mean ratings of the two group of respondents (accounting lecturers and
teachers) on the bank reconciliation skills required for entrepreneurship development by senior
secondary school leavers in Anambra State. The implication of this finding is that it helped to
validate the findings on research question three. The findings of this study are supported by
Igben (2009) who stated that entrepreneurs should notify the bank of any loss of document or
dead of an individual to avoid payments to wrong person(s). The bank performs number of
transactions on behalf of its customers without customer’s knowledge, therefore possessing the
skills to identify items that are different in both bank statement and cash books are very essential
of small and medium scale enterprises.
D. Basic financial accounting skills required by senior secondary school leavers with
regards to ledger skills for entrepreneurship development.
The data presented in Table 4 provided answers to research question four. The findings
revealed that ledger entry skills are in important skills for entrepreneurship development by
82
senior secondary school leavers. The principle findings indicated that senior secondary school
leavers should possess the ability to identify the giver and receiver of values in each transaction
that is the ability to identify trade debtors and creditors of any business since the transaction of
small and medium scale businesses are mostly on credit basis. The result of a t-test of
significance was used to test the H04 on the ledger scales required for entrepreneurship
development by senior secondary school students in Anambra State was presented in Table 10
and tested with t-test statistics at 0.05 level of significance and 194 degree of freedom. The
findings indicated that al the eighteen items of ledger scales were accepted by the respondent as
being essential skill for entrepreneurship development by senior secondary school leavers. This
is based on the result of the calculated grand mean and p-value of 2.50 and 0.05 respectively.
Therefore, it could be deduced that there is no significance difference between the mean
responses of accounting lecturers and teachers on ledger skills required for entrepreneurship
development by senior secondary school leavers. These findings are in line with view of Vitez
(2010) who stated that accounting skill is understanding of the nature of debit and credit and how
financial information flow through the general ledger. Furthermore, the findings revealed that
entrepreneurship development depends on the ledger skill for it is an intermediate skill needed to
be able to receive entries from subsidiary or prime books and modifies them and send them to
the final accounts. This finding is also supported by the view of Abdulrasheed et al (2012) who
stated that ledger is the ultimate destination of all entries recorded in the subsidiary books and
improves the accuracy and reliability of the accounting transactions which further provides the
input to financial statement for small scale enterprises.
83
E. Basic financial accounting skills required by senior secondary school students with
regards to trading, profit and loss account skill for entrepreneurship development.
The data presented in Table 5 provided answers to research question five. The findings
revealed that trading, profit and loss account skill is an essential skill required by senior
secondary school leavers in determining the development of their businesses. The finding of this
study is that ability to calculate profit or loss is the most essential skill that must be posses by
senior secondary school leavers. The result of H05 formulated on the trading, profit and loss
account skills required for entrepreneurship development by senior secondary school students
was presented in Table 11. The calculated grand mean and p-value for all the eleven items of the
cluster were greater than the t-test of 0.05. Thus the null hypothesis was upheld at 0.05 level of
significant. On these items, it was noted that accounting teachers and accounting lecturers agreed
on the trading, profit and loss account skill required for entrepreneurship development by senior
secondary school leaver in Anambra State. The implication of this result was that it was used to
confirm the findings made in research question five. This findings is supported with the view of
Life tips (2011) who stated that through specialized trainings, specific degree or on-the-job
experience, trading, profit and loss account skills entails the mastering of procedures in
calculating business profits.
F. Basic financial accounting skills required by senior secondary school students with
regards to balance sheet for entrepreneurship development.
The date in Table 6 provided answers to research question six. The finding of this study
revealed that balance sheet skills are very much required by senior secondary school leavers for
entrepreneurship development. The major finding of this study was the ability to identify and
84
calculate assets and liabilities of their businesses. Also, the result of a t-test of same significance
was used to test the H06 on the balance sheet skills required for entrepreneurship development by
secondary school leavers in Anambra State was presented in Table 12. The calculated grand
mean and p-value of items 1, 2, 5, 6 and 8 of the cluster had their values greater than 2.50 and
0.05 respectively, while items 3,4 and 7 had the mean ranges of 0.02,0.04 and 0.02 respectively
which indicated disagreement on items 3, 4 and 7. With these values being less than 0.05 level of
significance indicates that there is significance difference in the mean responses of accounting
lecturers and accounting teachers in the balance sheet items required for entrepreneurship
development by senior secondary school students in Anambra State. These findings are in
agreement with the findings of Abdulrasheed et al (2012) who stated that entrepreneurs should
be able to prepare and interpret financial statement and also be able to keep and maintain records
of receipt and payment (cash book), income and expenditure and a balance sheet for their
businesses.
85
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
Re- Statement of the Problem
Financial accounting skills would ultimately increase the development of
entrepreneurship among senior secondary school leavers in Anambra State. However, the none
acquisition of financial accounting skills by senior secondary school students which was
evidenced in the increasing number of unemployed secondary school leavers in the state,
inability of the youths to remain in their jobs and quick liquidation and collapse of small scale
businesses soon after establishment. Also, these evidence none achievement of the objectives as
stated in the National Policy on Education (2013) and senior secondary school curriculum of
business studies (2007) which aimed at providing entrepreneurs with technical and vocational
job specific skills for self-reliance and to provide fundamental instruction to help students
assume their economic roles as consumers, workers and citizens and provision for personal use
in future respectively. Hence, the need to determine the financial accounting skills required for
entrepreneurship development by senior secondary school students in Anambra State. To ensure
that right skills are being inculcated in the student while in school to improve entrepreneurship
development in Anambra state, these objectives were pursued to:
1. determine the prime book entry skills required for entrepreneurship development by
senior secondary school (111) students in Anambra state.
2. determine the cash book entry skills required for entrepreneurship development by senior
secondary school (111) students in Anambra state.
3. determine the bank reconciliation skills required for entrepreneurship development by
senior secondary school (111) students in Anambra state.
85
86
4. determine the ledger skills required for entrepreneurship development by senior
secondary school (111) students in Anambra state.
5. determine the trading, profit and loss account required for entrepreneurship development
by senior secondary school (111) students in Anambra state.
6. determine balance sheet skills required for entrepreneurship development by senior
secondary school (111) students in Anambra state.
Summary of Procedure used
The study adopted a descriptive survey research design. Questionnaire was the instrument
used for data collection for determining the basic financial accounting skills required by
senior secondary school (111) students for entrepreneurship development in Anambra State.
A set of 75 structured questionnaire items was used to gather information from 207
respondents made of 118 accounting teachers and 89 accounting lecturers in public
secondary schools and higher institutions in Anambra State respectively. The questionnaire
was face validated by experts in Business Education Department, Faculty of Vocational
Teacher Education, University of Nigeria Nsukka.
The reliability of the instrument was established using Cronbach Alpha formula for
determining the internal consistency. Reliability result of 0.880 was calculated for the
instrument after its trial test on 14 accounting teachers and 6 accounting lecturers in Enugu
State. The data was collected with the help of two research assistance and analyzed with the
use of SPSS 20 version, using real mean limit and standard deviation to answer six research
questions, while t- test was used to test the six null hypothesis at 0.05 level of significance
and at 194 degree of freedom.
87
Summary of Findings
Based on the data collected and analyzed, the following major findings of the study on basic
financial accounting skills required for entrepreneurship development by senior secondary school
(111) students in Anambra State are:
1. Seventeen skills on prime books entry skills for entrepreneurship development by senior
secondary school (111) students were very much required with the opinions of
accounting lecturers and accounting teachers. This was with the means ranging from 4.10
to 4.44.
2. A total of ten items were considered as very much required cash book skills for
entrepreneurship development by senior secondary school (111) students. They were in
agreement with the opinions of the respondents with means ranging from 4.13 to 4.57.
3. All the eleven items on the bank reconciliation skills were agreed as very important skills
required for entrepreneurship development by senior secondary school (111) students
with the means ranging from 4.18 to 4.48.
4. All the eighteen items of ledger skills were also considered as very much required skills
for entrepreneurship development as agreed by the opinions of the respondents with the
means ranging from 4.10 to 4.45.
5. Eleven items of trading, profit and loss account were considered very much required for
entrepreneurship development by senior secondary school leavers as opinioned by the
accounting lecturers and accounting teachers with means ranging from 4.32 to 4.62.
6. Five out of eight (8) items on the balance sheet skills were considered by the respondents
to be required for entrepreneurship development in Anambra State with their means
ranging from 4.13 to 4.62.
88
7. There was no significant difference in the mean response of accounting lecturers and
accounting teachers on the prime book entry skills required for entrepreneurship
development by senior secondary school (111) students in Anambra State.
8. There was no significant difference in the mean response of accounting teachers and
accounting lecturers on the cash book skills required for entrepreneurship development
by senior secondary school (111) students in Anambra State.
9. There was no significant difference in the mean response of accounting lecturers and
accounting teachers on the bank reconciliation skills required for entrepreneurship
development by senior secondary school leavers.
10. There was no significant difference in the mean response of the accounting teachers and
accounting lecturers on the ledger skills required for entrepreneurship development by
senior secondary school leavers in Anambra State.
11. There was no significant difference in the mean response of the accounting teachers and
accounting lecturers on the trading, profit and loss account skills required for
entrepreneurship development by senior secondary school (111) students in Anambra
State.
12. Significant difference existed in the mean response of the accounting lecturers and
accounting teachers on the balance sheet skills required for entrepreneurship development
by senior secondary school (111) students in Anambra State.
Conclusion
The study concludes that the basic financial accounting skills required for
entrepreneurship development by senior secondary school leavers in Anambra State are prime
book entry skills which includes: the ability identify prime books of entry and the items to be
89
recorded in each of them and ability to post transactions into the prime books. Cash books entry
skills are also required, these includes ability to identify cash transactions and ability to identify
the giver and receiver of values in any transaction.
Also the study that bank reconciliation skills required for entrepreneurship development
includes: ability to identify items that causes discrepancies in both cash book and bank statement
and ability to reconcile the both books. Ledger skills include the ability to identify the giver and
receiver of values in any transaction. Another important skill that is required for entrepreneurship
development is the trading, profit and loss account and balance sheet skills which include: ability
to calculate the gross or net profit or loss of any business and ability to prepare balance sheet
statement for internal use and for publication.
Finally, these determined financial accounting skills have great impact in the
development of entrepreneurship in Nigeria. No business will do well without proper keeping of
its financial records which these determined skills will assist the senior secondary school leavers
in Anambra State who intends to operate any business of their , manage and development their
businesses to greater height.
Implications of the Study
The findings of this study will have immense implication to the senior secondary school
students, accounting teachers, existing and potential entrepreneurs, education authorities,
curriculum planners, parents and Nigeria government at large.
This research will provide empirical evidenced on which further research will anchor
especially on entrepreneurship development and financial accounting in Anambra State in
particular and Nigeria at large. Another implication of the findings of this research work is that
the study will reveal to the prospective and existing entrepreneurs the reasons behind business
90
liquidations and retardation for them to guard against them to avoid further occurrence. The
findings of this study will expose major areas of concentration while teaching, planning and
supervising to the accounting teachers, curriculum planners and education authorities
respectively. The findings of this study will also increase the development of small of small and
medium scale enterprises in Anambra State in particular and in Nigeria at large which will in
turn bring economic growth and development, reduce unemployment rate and increase the
general standard of living of the entire Nigerian citizenry.
Recommendations
Based on the findings of this study the following recommendations were made:
1. that financial accounting teacher in Anambra State should lay emphasis on the
determined financial accounting skill while teaching by making sure that these
determined skills are fully covered while planning their lessons.
2. that financial accounting be made compulsory subjects in senior secondary schools in
Nigeria considering the need for economic development.
3. that government should organize seminars and workshops to educate stakeholders and
entrepreneurs on the findings of this study.
Limitation of the Study
This research work had the following limitations:
1. One of the limitations of this study was the challenging task of getting accounting
lecturers and teachers respond to the questionnaire as most of them complained of tight
schedule.
2. Another limitation was high cost of transportation due to hike in the price of petrol
experienced in November via December.
91
3. The study was also limited to senior secondary (111) students.
4. Another limitation was time and cost of extending this study to other states.
Suggestions of Further Studies
1. A study should be conducted on strategies for increasing number of students that offers
financial accounting in senior secondary schools in Anambra State.
2. A study should be conducted on the basic financial accounting skills required for
entrepreneurship development by senior secondary schools in Abia, Imo and Enugu
States in Nigeria.
92
References
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APPENDIX A
POPULATION DISTRIBUTION TABLE
Number of Accounting Lecturers in Public High Institutions in Anambra State S/n Names of higher institutions Number of accounting lecturers 1. NwaforOrizucollege of education
Nsugbe 17
2. Federal collee of education technical Umunze
7
3. NnamdiAzikiwe university Awka 26 4. Federal polytechnic Oko 27 5. Anambra state university Uli 12 Total 89 Source: H.O.D’s of various institutions July, 2015.
Number of accounting teacher in Government secondary schools in AnambraState S/n Zones offering Financial Accounting Secondary
School Number of Accounting Teachers
1. Aguata zone 11 2. Awka zone 25 3. Nnewi zone 21 4. Ogidi zone 21 5 Onitsha zone 26 6. Otuocha zone 14 Total 118 Source: Anambra state ministry of education Awka July, 2015.
SubTotal207
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APPENDIX B
Department of Vocational Technical Education, Business Education Unit, University of Nigeria, Nsukka. 3rd June, 2015.
Dear Respondents, Questionnaire on Basic Financial Accounting Skills Required for Entrepreneurship Development by Senior Secondary School Students of Anambra State I am a postgraduate Student of the above named institution, currently carrying out a study
on the topic stated above. You have been identified as one who could provide useful information
needed to successfully conduct the study. I will appreciate it if the questionnaire will be
completed by you and return same to the bearer
You are assured that your responses shall be treated with utmost confidence and will be
used strictly for the intended purpose.
Yours faithfully,
OguoraEuchariaU.
99
SECTION A GENERAL INFORMATION
Instrument: Please tick (√) as appropriate in the box provided An accounting lecturer ( ) Accounting teacher ( ) Instruction: Please indicate the degree of your agreement with the following statement by ticking (√ ) in the appropriate column. Key: Very much Required UMR = (5) Much required MR = (4) Averagely Required AR = (3) Somewhat Required SR = (2) Not Required NR = (1)
100
SECTION B QUETION ONE
What are the prime book entry skills required for entrepreneurship development by senior secondary school students of Anambra State?
S/N ITEM VMR (5)
MR (4)
AR (3)
SR (2)
NR (1)
1. Ability to list the prime books 2. Ability to identify credit transactions 3. Ability to identify items that are entered into the
sales day book
4. Ability to post items into the sales day book 5. Ability to transfer the total of sales day book to the
appropriate side of the sales account
6. Ability to identify items to be entered into the purchases day book
7. Ability to post items into the purchases day book 8. Ability to transfer the total of purchases day book to
the appropriate side of the purchases account
9. Ability to identify items of return inward 10. Ability to post items into the return inward day book 11. Ability to transfer return inward total to the
appropriate side of the return inward account
12. Ability to identify items of return outward 13. Ability to post items into the return outward day
book
14 Ability to transfer total of return outward to the appropriate side of the return outward account
15. Ability to identify items to be posted to the journal proper
16. Ability to identify accounts to be debited or credited in the journal proper
17. Ability to write narrations of entries in the journal proper
101
SECTION C QUESTION TWO
What are the cash book entry skills required for entrepreneurship development by senior secondary school students of Anambra State S/N ITEM VMR
(5) MR (4)
AR (3)
SR (2)
NR (1)
18. Ability to draw up a cash book columns 19. Ability to identify cash transactions 20. Ability to identify the debit and credit entries of the
cash book
21. Ability to identify credit and debit balances in the cash book
22. Ability to identify kinds of cash book 23. Ability to post items into the cash book 24. Ability to make a contra entry in the both debit and
credit sides of the cash book
25. Ability to calculate and deduct cash discounts in the cash book
26. Ability to post and cast items in the cash book correctly
27. Ability to balance the cash book
SECTION D QUESTION THREE
What are the bank reconciliation statement skills required for entrepreneurship development by senior secondary school students of Anambra State? S/N ITEM VMR
(5) MR (4)
R (3)
SR (2)
NR (1)
28. Ability to identify items that cause discrepancy between cash book and bank statement
29. Ability to adjust the cash book balance 30. Ability to identify unpresentedcheques 31. Ability to identify uncreditedcheques 32. Ability to identify errors in the cash book 33. Ability to identify errors in the bank statement 34. Ability to prepare the bank reconciliation statement 35. Ability to balance the adjusted cash book 36. Ability to reconcile the cash book and the bank statement using
the identified items that cause the error
37. Ability to write up bank statement and cash book at the same date 38. Ability to identify the items to be added or deducted from the
adjusted cash book
102
SECTION E QUESTION FOUR
What are the ledger skills required for entrepreneurship development by senior secondary school students of Anambra State? S/N ITEM VMR
(5) MR (4)
AR (3)
SR (2)
NR (1)
39. Ability to identify personal accounts 40. Ability to identify impersonal accounts 41. Ability to post transactions into different classes of account
correctly
42. Ability to balance each account correctly 43. Ability to transfer the balance of each account to the trial
balance
45 Ability to observe the double entry principle in the ledger
46 Ability to draw the trial balance for ledger account 47 Ability to identify the giver and the receiver of values in
each transaction
48. Ability to draw up a trial balance 49. Ability to transfer balances from different ledger account
into the trial balance
50. Ability to identify errors that affect the trial balance 51 Ability to identify errors that does not affect the trial
balance
52 Ability to correct errors 53. Ability to transfer errors no identified to the suspense
account
54. Ability to add up the totals of the trial balance 55. Ability to identify accounts with debit balances 56. Ability to identify accounts with credit balances 57. Ability to title the trial balance
103
SECTION F QUESTION FIVE
What are the trading, profit and loss account skills required for entrepreneurship development by senior secondary school students of Anambra State? S/N ITEM VMR
(5) MR (4)
AR (3)
SR (2)
NR (1)
56. Ability to identify items that make up trading account 57. Ability to prepare a trading account to determine cost
of goods sold
58. Ability to obtain the gross profit or loss in trading account
59. Ability to identify expenses associated with profit and loss account
60. Ability to identify the business incomes and add them to the gross profit correctly
61. Ability to transfer gross profit from trading account to the profit and loss account
62. Ability to add provisions to the sides of profit and loss account correctly
63. Ability to obtain the net profit or loss in profit and loss account
64. Ability the cast out the items in trading, profit and loss account correctly
65. Ability to calculate goods available for sale in the trading account
67. Ability to deduct expenses in the profit and loss account
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SECTION G
QUESTION SIX
What are the balance sheet skills required for entrepreneurship development by senior secondary school students of Anambra State?
S/N ITEM VMR (5)
MR (4)
AR (3)
SR (2)
NR (1)
68. Ability to differentiate between assets and liabilities 69. Ability to identify different types of assets and
liabilities
70. Ability to transfer net profit from profit and loss account to the balance sheet
71. Ability to calculate and deduct depreciations from fixed assets
72. Ability to name the balance sheet appropriately 73. Ability to prepare the balance sheet for internal use
and for publication
74. Ability to enter the balance sheet items orderly 75. Ability to balance up the balance sheet