Chapter 1 THE PROBLEM AND ITS BACKGROUND Introduction Accounting is a service activity which main function is to provide quantitative

information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions, in making reasoned choices among alternative courses of action. Since Accounting includes variety of branches and services different agencies have set out their own definition of the service activity. The Accounting Standards Council (ASC) provides the following: Accounting is a service activity. Its function is to provide quantitative information, primarily financial in nature, about economic entities, that is intended to be useful in making economic decision. On the other hand, the Committee on Accounting Terminology of the American Institute of Certified Public Accountants defines Accounting as follows: Accounting is the art of recording, classifying and summarizing in a significant manner and in terms of money, the transactions and events which are in part at least of a financial character and interpreting the results thereof. The American Accounting Association in its Statement of Basic Accounting Theory clearly states the following: Accounting is the process of

identifying, measuring, and communicating economic information to permit informed judgement and decision by users of information. Based on the foregoing definitions, Valix (2013) cited three important points that must be emphasized: 1. Accounting is about quantitative information. 2. Information is likely to be financial in nature. 3. Information should be useful in decision making. Despite the complexities of the accounting system now being utilized in the industry, it is rather incorrect to assume that the activity was recently formed. On the contrary, Accounting was developed in ancient times. The system present today arose from that ancient development. However, the birth of double-entry bookkeeping in the 14th century is seen as being the beginning of the modern accounting period. The first person who documented the accounting system utilized by Venetian merchants was a Franciscan friar named Luca Pacioli. In his book Summa de Arithmetica, Geometria, Proportioni et Proportionalita, Pacioli described double-entry bookkeeping and other commerce-related concepts. Double- entry bookkeeping is a system in which a debit and credit entry is entered for each transaction: Every debit has its credit every amount that is charged to on account must be placed to the credit of another. During the Industrial Revolution, methods were required which could be used to track costs related to large scale production in factory-manufacturing

operations.During this period, there became a need for more advanced cost accounting systems, and the development of corporations created much larger classes of external capital providers - shareholders and bondholders - who were not part of the firm's management but had a vital interest in its results. The rising public status of accountants helped to transform Accounting into a profession, first in the United Kingdom as Edinburgh Society and Glasgow Institute of Accountants but later reverted to Chartered Accountants and then in the United States as American Association of Public Accountants. Due to the increasing demand for accounting services, countless Accounting standard-setting bodies are instituted to organize and unify the profession of Accounting across the globe. International accounting organizations includes the International Accounting Standards Board (IASB), International Federation of Accountants (IFA), and the IFRS Foundation. Each nation also has its own standard-setting body that regulates the Accounting profession in its region. The sole standard-setting body present in the Philippines is the Board of Accountancy (BOA) which is created under Republic Act No. 9298 and authorized by law to promulgate rules and regulations affecting the practice of the accountancy profession in the Philippines. One of the tasks of the Board of Accountancy in the Philippines is to implement an education system whose graduates will be able to pass the board exam for Accounting and meet the demands of the industry in basic accounting

skills such as bookkeeping, tax and payroll accounting, and other miscellaneous accounting services as such. An Associates Degree in Accounting covers the basic courses taught in a bachelors degree. These courses are achieved through completing a number of classes related to basic accounting principles, taxes, analysis of financial statements, payroll, statistics, and accounting software and technology. Familiarity with spreadsheets and bookkeeping will be addressed.

Communication skills will also be taught and practiced to ensure the graduate will fit into an office or corporate setting. A typical Associates Degree in Accounting will take two years or four full semesters of course work. The U.S. Bureau of Labor Statistics (BLS) predicts that over the next 5-6 years, associates degrees are more and more likely to set applicants apart from those with only a high school diploma. To address the issue of job mismatch, thousands of universities and colleges all over the world offer not only bachelors but also an associate degree a very practical and highly valuable alternative. With proper lessons and training from competent teachers, students are job ready after undertaking the courses provided. It prepares students with entry-level, basic skills, enabling them to qualify for entry-level technical jobs. Like any college degree, an associate degree opens doors to higher income. It guarantees a better-paying job compared with workers whose highest level of educational attainment was a high school diploma, workers averaged an

extra $128 a week in 2001, according to the Bureau of Labor Statistics (as cited in Crosby, 2002). People with associate degrees also are more likely to find jobs: the unemployment rate in 2001 was more than 30 percent lower for associate degree holders compared with high school graduates. And, according to several academic studies, advantages in the job market might be even greater for those just starting their careers and for those who work in a career related to their degree. The cost of a two-year program is significantly cheaper than a bachelors degree which in a way is more convenient for students into having an educational edge. By parting the time required to obtain the degree, one is able to save money and still wind up with a valuable education that will land them a good job. Another good thing, most universities offer associates degree to pursue bachelors degree in the future. Since, associates degree can be earned in most four-year universities, or even online. One can pursue a degree while working full- or part-time and have the flexibility to study what one wants, often when one wants it. Associates degree programs are available from public community colleges, private 2-year colleges, for-profit technical institutes, and many 4-year colleges and universities. Though taking classes from home is more common in associate degree programs than in any other type of educational credentials program, with more than 9 percent of associate degree students using distance learning in 1998, according to the U.S. Department of Education.

Background of the Study As of today, an Associates Degree in Accounting is widely offered in different colleges and universities outside the Philippines. Each program is targeted at a specific service like bookkeepping, cost accounting, tax, or payroll accounting. Among the different colleges and universities in the Philippines, Batangas State University is the only university which offers a 2-year Associate in Accounting Degree. It is a state university that has ten campuses in the Province of Batangas particularly in Batangas City, Lipa City, Balayan, Lemery, Lobo, Malvar, Nasugbu, Rosario, San Juan. Centered in the capital of the province, the university was ranked 64th among the best performing colleges and universities of the Philippines.

Seal of Batangas State University Figure 1

Location of Batangas State University Figure 2 Batangas State University was founded in 1903 as Manual Training School under the supervision of an American principal, Mr. Scheer. It was renamed Batangas Trade School in 1905, whose admission was limited to only male students. By 1948, the school was rebuilt under the Rehabilitation Act of 1946 and it begun admitting female students in food trades, garment trades and cosmetology. On 1953, its name was changed to Pablo Borbon Memorial Trade School in pursuance to Republic Act 746 which bestowed a national status upon the school. It was again renamed Pablo Borbon Regional School of Arts and Trades and started offering technical courses under the able stewardship of Mr. Arsenio Galauran who stoop down in 1963 succeeded by Mr. Rosario De Leon. Mr. De Leon immediately initiated innovative plans to build-up efficient citizenworkers with the inclusion of opportunity terminal classes in auto mechanics,

machine shop practice, electronics, radio mechanics, cosmetology and dressmaking. Republic Act 4872 authorized the offering of the Bachelor of Science in Industrial Education program in 1965. On 1968, the school was then converted into a state college by virtue of Republic Act 5270 known as Pablo Borbon Memorial Institute of Technology. It was the 23rd state college of the country at the time of conversion having Mr. Rosario De Leon sworn in as its first president. The college offered Industrial Teacher Education Engineering courses with specialization in Mechanical and Electrical Engineering in 1971. On 1974, Civil Engineering was added to the course offering. The Graduate School was opened with the offering of a master's program leading to the degree of Master of Arts in Industrial Education, major in Administration and Supervision. A 200-hour skills training for out-of-school youth in practical electricity, automotive, mechanics, food trades and woodcraft named Extension Trade Training Program was introduced in 1977. In the succeeding year, Master of Management with specialization in Business Management and Public Management was offered on consortium with the UP College of Public Administration. By 1984, the College acquired a three-hectare site at Alangilan, Batangas City through the efforts of the second college president, Mr. Isabelo Evangelio. On 1986, Dr. Mariano O. Albayalde then vice president was sworn as third president of the College. The College continuously grows and expands by offering a variety of new courses such as a pilot class of the general secondary curriculum with emphasis on science and mathematics, doctoral program in Industrial Education

Management (Ed. D.) in consortium with TUP, Dual Training System (DTS), Bachelor of Arts in Development Communication and Bachelor of Science in Biology, Bachelor of Science in Architecture and Bachelor of Science in Chemical Engineering, Statistics, Physics, Behavioral Science, Sociology, and Public Administration and Information System Management. And on 1999, the School of Accountancy, Business and Economics, Center of Gender and Poverty Studies and School of Food Science were established. New courses were offered by the year 2000 namely Environmental and Sanitary Engineering, Fine Arts, Information System Management, Computer Education, Information Technology, Marine Biology, Psychology, Peace and Security Studies, Guidance and Counseling, Business Administration, and Secretarial Administration. Then finally, on March, 2001, by the virtue of RA 90451 signed by Her Excellency Former President Gloria Macapagal-Arroyo, Pablo Borbon Memorial Institute of Technology was elevated into Batangas State University. Theoretical Framework Facing trade-offs is one of the four principles that affect individual decision making. In order to acquire something that one likes, onewill usually have to give up another in exchange. This being stated puts no mystery to what an economy is. It is just a group of people dealing with one another as they go about their lives. Take into consideration the parents deciding how to spend their family income. They can use it for their childrens education, for their food, for their clothing, or put in their savings. When they choose to spend an extra Peso on one of these products, they have one less Peso to spend on some other product.

Or consider the students deciding how to allocate their precious resource which is time. They may spend their time studying or pursuing a degree in college or they may look for a job immediately after graduation and start earning. As the old saying goes, There is no such thing as free lunch. There are things that should be given up to move on with life. Cost-Benefit Principle is another principle of individual decision making. The cost of a product is what you give up to get it. Whether it is looked from the point of view of the possible consumers (students) or from the investors (university), the cost and benefit of establishing an Associate in Accounting Administration degree must be determined to enlighten them of the opportunities that lie ahead. The benefits of pursuing or offering a two-year course should overweigh the cost to be incurred or given up. The Law of Demand and Supply is an economic model of price determination in a market which states that in a competitive market, the unit price of a particular good will vary until quantity demanded by consumers at current price meets with the quantity supplied by producers at current price creating an economic equilibrium of price and quantity. The four basic principles of demand and supply are: 1. Other things constant, the quantity demanded of a product falls when the price of the good rises. 2. Other things constant, the quantity demanded of a product rises when the price of the good falls.

3. Other things constant, the quantity supplied of a good rises when the price of a good falls. 4. Other things constant, the quantity supplied of a good falls when the price of a good rises. Value pricing is a pricing strategy which offers just the right combination of quality and good service at a fair price. Tuition fee is the main cost incurred by students to enrol a course in a university. The cost must be reasonable enough and at the same time affordable for the possible enrolees without sacrificing the quality of education offered by the institution. Societal Marketing Concept is one of the five Marketing Management Philosophies which concludes that the institution should consider or identify the consumers wants, needs and interests. In order to sell effectively the new course offered, the institution must study the current situation of the economy to dig deeper on the needs and capabilities of the prospective enrolees. Product concept, another Marketing Management Philosophy, states that consumers will favor the product that offers good quality and good performance and features that the institution should therefore devote its energy to making continuous product improvement. The significance of these Law, principles, philosophies, and strategy will be the basis of evaluation of the acceptability of Associate in Accounting Administration degree. Specifically, the effect of these in the marketing aspect,

management aspect, financial aspect, and socioeconomic aspect will be looked into.

Conceptual Framework
INPUT Respondents Profile Gender Age name of school residential address/district monthly family income number of family members 1. Respondents perception of accounting administration as a degree in terms of campus location campus layout tuition and other miscellaneous fees 2. General status of the proposed degree in terms of management aspects technical aspects marketing aspects financial aspects

PROCESS

OUTPUT
1. Determined profile of the respondents 2. Determined respondents perception of Accounting Administration as a degree 3. Determined viability of the proposed degree in terms of management aspects technical aspects marketing aspects financial aspects

Presentation, Analysis Interpretation data through questionnaire conducted interviews. and of

gathered the and some

FEEDBACK

Research Paradigm of the Feasibility Study of Associate Degree in Accounting Administration in CaMaNaVa Area Figure 3 Figure 3 shows the paradigm of the study. It consists of three boxes namely: 1.) the input box which contains respondents profile and their perception on accounting administration as a degree in terms of campus location, campus layout, and tuition and other miscellaneous fees, 2.) the process box which has the presentation, analysis, and interpretation of data gathered through the questionnaire and conducted interviews, and 3.) the output box which contains the determined profile of the respondents, their determined perception on accounting administration as a degree and the viability of the proposed degree in terms of the four aspect such as the management, technical, marketing and financial. Statement of the Problem The purpose of this study is to make, A Feasib ility Study on the Introduction of Associate in Accounting Administration Degree in the University of the East- Caloocan: An Evaluation of Acceptability among Graduating Students from Selected Public High Schools in CaMaNaVa Area. Its aim is to ascertain whether a business undertaking is viable and feasible. This study sought to answer specifically the following questions:

1. Is the introduction of Associate in Accounting Administration Degree in the University of the East-Caloocan is acceptable and feasible in terms of the following demographic profile of the respondents 1.1 Gender 1.2 Age 1.3 Name of School 1.4 Residential district/Address 1.5 Monthly Family Income 2. How do respondents perceive associate degree in accounting

administration as a course in terms of the following: 2.1 Course preference 2.2 Awareness of Associate degree in accounting administration 2.3 Willingness to take this course 2.4 Quality of Learning? 2.5 Amount willing to spend as to tuition and other school fees 3. What will be the general status of the proposed business in the term of the following: 3.1 Management Aspects/ Technical Aspects

3.1.1 Form of ownership 3.1.2 Capitalization 3.1.3 Pre-operating activities 3.1.4 Project schedule 3.1.5 Organizational chart of the college of Business administration 3.1.6 Manpower requirements 3.1.2.1 Job description 3.1.7 Internal Policies 3.1.8 Compensation and benefit 3.2 Technical Aspects 3.2.1 Project Description 3.2.2 Project objectives 3.2.3 Proposed Curriculum 3.2.3 Processes of the Project 3.2.3.1 Admission and Registration 3.2.3.2Grading System 3.2.3.3 Dropping of Subjects

3.2.4 University rules and regulations 3.2.5 Educational facilities and materials needed 3.2.6 Vicinity and Layout 3.2.7 Materials, utilities and labor requirements 3.2.8 Pricing scheme 3.2.8.1 Forecasted Tuition fees 3.2.8.2 Forecasted Miscellaneous fees 3.2.9 Costing Scheme 3.2.9.1 Salaries Expense 3.2.9.2 Pre-operating expenses and advertising expenses 3.2.9.3 Supplies expense 3.2.9.4 Utilities expense 3.3 Marketing Aspect 3.3.1 General Market Description 3.3.1.1 Market Size 3.3.2 General Company Description 3.3.2.1 SWOT analysis

3.3.3.2 Market Segment 3.3.3.2.1 Target Market 3.3.3.2.1 Market positioning 3.3.3.3 Marketing Mix Strategies 3.3.3.3.1 Promotion 3.3.3.3.2 Product 3.3.3.3.3 Place 3.3.3.3.4 Pricing 3.3.3.3.5 People 3.3.3.3.6 Process 3.3.3.3.7 Physical evidence and environment 3.3.3.4 Marketing Program 3.3.3.4.1 School-to-school promotion 3.3.3.4.2 Distribution of leaflets and flyers 3.3.3.4.3 Use of Tarpaulin 3.3.3.4.4 Advertisement at University of the East website 3.3.3.5 Demand Analysis

3.3.3.5.1 Population 3.3.3.5.2 Sample Size 3.3.3.5.3 Survey Results 3.3.3.5.4 Projected Demand 3.3.3.6 Supply analysis 3.3.3.6.1 Historical supply 3.3.3.6.2 Current Supply 3.3.3.6.3 Projected supply 3.3.3.3.7 Competitor analysis 3.4 Financial Aspect 3.4.1 Major Assumptions 3.4.2 Financial ratios 3.4.3 Liquidity Ratio 3.4.4 Acid Test Ratio 3.4.5 Net Working Capital 3.4.6 Profitability Ratio 3.4.7 Return On Assets

3.4.8 Gross Margin Ratio 3.4.9 Net Profit Ratio 3.4.10 Net Profit Ratio 3.4.11 Activity Analysis 3.4.12 Solvency Analysis 3.4.13 Debt Ratio 3.4.14 Time Interest Ratio 3.4.15 Debt Equity Ratio 3.4.16 Break Even Analysis 3.4.17 Break even sales 3.4.18 Payback period Hypotheses In line with the statement of the problem of the study, the following hypotheses were formulated and tested at 0.05 level of significance: 1. There is no significant relationship between media and publicity and acceptability of associate accounting administration degree. 2. There is no significant relationship between personal interest and acceptability of associate accounting administration degree.

3. There is no significant relationship between job prospect and acceptability of associate accounting administration degree. 4. There is no significant relationship between family members and peers and acceptability of associate accounting administration degree. Scope of the Study The study is conducted to determine the acceptability of all graduating students from twelve (12) selected public high schools in Caloocan, Malabon, Navotas, and Valenzuela City. The selection was based on the top three most populated high schools in each city. The following schools, with its address and total number of graduating students are the following: AVERAGE NO.OF SCHOOL NAME ADDRESS GRADUATING STUDENTS 95 Marang St., Amparo High School AmparoSubd., Caloocan City ArkongBato National High School Baesa High School San Diego St., Valenzuela City

Reparo Rd.,

Baesa, Caloocan City M. De Castro St., Bagong Barrio National Bagong Barrio, High School Caloocan City Bignay ES Bignay National High Compound, School Valenzuela City CanumayNatioinal High School L. Santiago St., Valenzuela City Phase I, Kaunlaran National High School Kaunlaran Village, Navotas City Malabon National High School Navotas National High School Panghulo National High School M. Naval St., Malabon City M. Naval St., Navotas City 7 Bautista St., Malabon City

Dunwoody St., Potrero National High University Hills, School Malabon City San Rafael 1 Taliba

National High School

St., Navotas City

Selected Schools in CaMaNaVa Area with Address Information and Average Number of Graduating Students Figure 4 Due to time constraint and practical reasons, the researchers did not classify the data gathered based on sex and age of the participants. Significance This study ascertains and evaluates the acceptability of the Associate degree in accounting administration among the graduating high school student in the CaMaNaVa area. A good promotional strategy must be set up in order to promote and provide an awareness of the existence of this course to the prospective consumers. Significance to students. This study will help to provide an alternative option to the students to access education with a lower cost and earn a degree in a short period of time since it is only a 2-year course. Another significance to this to students is it is a transferrable degree. Meaning this program will be equivalent to a first half of bachelors degree so if the student complete this program, he/she

can proceed to another course which is related to this program and earn a bachelors degree. Significance to the University.To evaluate if an investment on a project should be made or not. Also this program will help the university to maximize its educational resources, and also to keep the university current in the educational marketplace. In economic perspective, this study is significant because it will help to reduce the unemployment rate in the country since compared to high school graduates, graduates in this program is competitive enough to find a work and grab a job opportunity. This will also help to reduce the unemployment rate by avoiding the labor or skill mismatch since not position requires a bachelors degree, there are still some jobs that require only a specific skill so with study this can avoid labor mismatch This study is significant in the corporate world since this study will provide adequate people equipped with accounting skills in the business industry since there is a growing demand for accountants and auditors compared to other occupation in the corporate world. To other researchers. This will serve as their guide in conducting their studies related with this topic and can be used as their reference. Definition of terms

For the purpose of clarity and understanding, the following terms are conceptually and/or operationally defined by the researchers. Associate Degree. As defined by Crosby (2002), it is a two-year degree, prepares students for a career following graduation or allows them to transfer into a bachelors degree program. Associate in Accounting Administration Degree. It is a two-year course, offers students accounting, management, marketing, finance, and economics subjects that are essential for ones success in a business career.