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INTRODUCTION

Small and Medium Enterprises are very popular and can be a great factor in an

economy especially in a developing nation (Ramakrishnan, 2013). Gomez (2010)

emphasized the lack of training of neighborhood variety stores and the size of it to

compete with other kinds of established business. While a study by Wilkie (2010) said

that most stores have insufficient fund due to lack of investment and conscious price

entrepreneur would like to buy goods at historical cost for them to gain at the same time.

For this research, we would like to concentrate to a retail business specifically called

neighborhood variety store and the accounting practices applied by store owner of it, to

find out if their age, sex and educational attainment affect how they practice accounting

in their business and to improve their knowledge regarding accounting practices.

The researchers conducted a study to know the accounting practices of variety

store owners and how they may be able to use the information the researchers have

gathered and if it really helped in the sustainability and survivability of the businesses

through the years of operations.

Statement of the Problem

This study determined the accounting practices of variety store owners in

Barangay Villamonte, Bacolod City.

Specifically, this study aimed to answer the following questions:

1. What is the profile of the neighbourhood variety store owners?

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2. What accounting practices are employed in terms of?

a. Financing

b. Purchasing

c. Revenue-generating activities

3. Is there a significant relationship between accounting practices and the

following variables of the study?

a. Sex

b. Age

c. Civil Status

d. Educational Attainment

e. Number of years in Operation

4. What recommendations can be made to the sari-sari store owners?

Research Hypothesis

There is no significant association between the accounting practices of the

respondents and their profile in terms of:

a. Sex

b. Age

c. Civil Status

d. Educational Attainment

e. Number of years in Operation

Conceptual Framework
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This framework merely elaborated the study of accounting practices among

variety stores in Barangay Villamonte, Bacolod City. The variables of this study were the

variety store owner’s profiles which comprise the age, gender, civil status, educational

attainment and number of years in operation.

The accounting practices may vary depending on different variables, one of them

is the age of the variety store owners. Studies show that people tend to be more ethical as

they grow older. However, some empirical studies find that younger people render

stricter ethical judgments than older people (Ede et al., 2000; Vitell et al., 2007).

Male and female have different perception about a business and they both have

their weaknesses and strengths when making a decision. Huston (2014) said that multiple

studies appear to have shown that men and women make decisions differently in times of

stress, and how this seems to demonstrate distinctions in how men and women react to

the hormone cortisol.

Also, certain studies suggest that higher levels of education lead to better

performance in entrepreneurial activities than when working as an employee (Evans and

Leighton, 1989). It is believed that well-trained workers tend to be more productive and

earn more money than workers with poorer training.

Lastly, the number of years the variety stores have been operating may affect the

owners’ application of accounting practices. It is believed that there is a relationship

between the age of the business and how it is operated to achieve efficiency and

effectiveness. The decline of the performance of the business may be a reason for the

failure for it to last longer. (Loderer, Neusser, and Waelchli,2009).

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Owner’s Profile
 Age Accounting Practices
 Sex  Financing Recommendations
 Civil Status  Purchasing to the sari-sari
 Educational Attainment  Revenue store owners
 Number of years in Generation
operation

Figure 1: Conceptual Framework showing the variables of the study

Scope and Limitations

The scope of the study tackled the profile of the respondents and their

corresponding accounting practices of the variety stores located in Barangay Villamonte,

Bacolod City. These accounting practices will include the financing, purchasing, and

revenue – generating activities. Moreover, the study will be also limited to the chosen

variables, namely age, sex, civil status, educational attainment and number of years in

operation. Due to limited timeframe, the researchers decided to choose 100 variety stores

through convenience sampling. The researchers expected limited information due to its

confidentiality.

Significance of the Study

This would be relevant to the business’ revenue generation. This study would be

helpful in different kinds of business specifically small enterprises. In addition, this study

would be beneficial to the following:

Store Owners. The result of the study would be primarily beneficial to the store

owners and would improve their accounting practices.

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Future Entrepreneurs. The result of the study would be advantageous to those

who plan to start a business similar to a variety store.

Accounting Organizations. The result of the study would help accounting

organizations implement programs and seminars for small to medium enterprises.

The Researchers. The result of the study would give knowledge to them as the

researchers would want to have their own business and on how to properly account

revenue and expenses.

Other Researchers. The result of the study would help other researcher on their

future studies as reference.

Definition of terms

Accounting Practices. This refers to the normal, practical application of

accounting and/or auditing policies that occurs within a business; in this study it is how

variety stores kept track of their daily financial records.

Financing Activities. Conceptually, it is defined as methods an organization uses

to obtain financial resources from financial markets and how it manages these resources

(Ballada, 2013). Operationally, it is defined as the practices employed by the variety store

owners to fund their business.

Variety store. More commonly known as sari-sari store, are small retail outlets

that can be found in almost all neighborhoods, sometimes even in every street corner in

the Philippines; in this study they were the respondents.

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Profile. This refers to a brief written description that provides information about

someone or something; in this study this referred to personal identification of respondents

that may affect the accounting practices applied corresponding to sex, age, civil status,

educational attainment and number of years in operation.

Purchasing Activities. Conceptually, it is defined as the activity of acquiring

goods or services to accomplish the goals of an organization; operationally, it is defined

as the practices variety stores employ when they purchase the goods or restock their

inventory.

Revenue-Generating Activities. Conceptually, it is defined as the process by

which a company markets and sells a product or service to produce income.

Operationally, it is how variety stores account and keep track of their sales or income.

Review of Related Literature

The importance of entrepreneurship in the development of the country had been

undeniably significant. Private sector development and entrepreneurship development are

essential ingredients for achieving the Millennium Development Goal of reducing

poverty. While sound macroeconomic policies and providing market access are crucial,

emerging markets need to nurture and develop entrepreneurs able to take advantage of

opportunities created by globalization. History shows that economic progress has been

significantly advanced by pragmatic people who are entrepreneurial and innovative, able

to exploit opportunities and willing to take risks. The great bulk of local enterprises are

micro-businesses, making up to 91.9%, with small and medium enterprises comprising

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only 7.8% of the total entrepreneurs. Large enterprises account for merely 0.33% of total

enterprises.

The neighborhood sari-sari (variety or general) store is part and parcel of daily

life for the average Filipino. Any essential household good that might be missing from

one’s pantry – from basic food items like coffee and margarine, to other necessities like

mosquito coils, soap, and matches – is most conveniently purchased from the sari-sari

store nearby at affordably portioned quantities, sometimes even on credit. Apart from the

most affluent communities, the sari-sari store is a constant feature of residential

neighborhoods in the Philippines both in rural and urban areas, proliferating even in the

poorest squatter communities.

Studies reveal that business success is contributed to the management practices,

entrepreneurial competencies and personal characteristics of business owners while study

of Parilla (2009), emphasized the link of management practices, entrepreneurial

competencies and business success, however, there is still a limited literature to prove on

the comparison of management practices of microbusiness owners and small business

owners. It is in this context that this study was conceptualized and it elicited information

on the differences and similarities of management practices of microbusiness and small

business owners. This study benefited the businesses owners as this provided them

information on the management practices for them to have benchmark.

More recently, a study by Coke (2002) on microfinance group lending finds that

35 percent of women borrowers in the Western Visayas region choose to invest in a sari-

sari store, even though group members are typically neighbors. Market research studies

by AC Nielsen report that the number of sari-sari stores nationwide grew by an estimated
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88 percent between 1997 and 2000 (Bethge, 2003), 14 percent in 2002 (Bonnin, 2004:

80), 13 percent in 2003 (Capistrano, 2005), and 7 percent in 2004 (Amojelar, 2006).

These studies confirm the observation that the sari-sari store has remained popular as a

micro-enterprise, resulting in a growing flow of new entrants despite the oversaturation

that already seems to exist. The most recent study is by Bonnin (2004), who conducted a

qualitative survey of 30 women sari-sari store owners in 3 Metro Manila communities

experiencing insecure housing

As for Ben Hamadi et al. (2014), they tried to determine to what extent the profile

influence on the adoption of budgetary innovations in SME. They highlighted three

profiles of Tunisian leaders, the young managers who adopt more budgetary innovation

than the accomplished adults whereas the experimented patriarches do not adopt it. So the

profile of the Tunisian actor influences the management accounting system of the SME.

Davila (2005) found that the age of the entrepreneur is relevant to explain the

management accounting system. Solle and Roubey (2003) explain that the emergence of

management tools is intimately linked to social relations. Moisdon (1997) declares that to

rationalize the choice of management tools is a reductive vision and depends largely on

subjective appreciations. Walley et al. (1994) note that the factors which relate to the

characteristics of the actors have a significant influence on the adoption of modern

systems of costing.

Ngongang (2007) found that both behavioral contingency factors of experience

and age of the manager had no significant effect on accountants practice. Similarly, in

Tunisian context Lassoued and Abdelmoula (2006) conclude that the age of the leader

has no influence on the use of accounting data. They also show that the experience of the
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manager did not significantly influence the use of accounting data, but the leader training

level is significantly related to the degree of use of accounting data without determining

clearly the direction of the relationship. However, the profile of the manager determines

the use of tools and accounting practices of the Tunisian SMIs.

Age is a variable for which empirical results differ across studies. Research

frequently predicts the relationship between age and strictness of ethical judgments to be

positive (Chiu, 2003; Peterson et al., 2001; Vitell, Singh and Paolillo, 2003). That is,

people tend to be more ethical as they grow older. However, some empirical studies find

that younger people render stricter ethical judgments than older people (Ede et al., 2000;

Vitell et al., 2007). Other studies report no significant relationship between age and

ethical judgments (e.g., Barnett and Valentine, 2004; Schepers, 2003). Despite these

inconsistencies, the theoretical consensus appears to support that age improves one's

ability to apply relevant ethical standards, which produces more disapproving views of

ethical lapses. H2. As age increases, ethical judgments become stricter.

Another influential biographic variable that might have bearing on job satisfaction

is marital status of the employees. However, there are not enough studies to draw any

conclusion about the effect of marital status on job satisfaction but the limited research

conducted on this area consistently indicates that married employees are more satisfied

with their jobs than are their unmarried coworkers (Austrom et. al. 1988; Federico et. al.

1976; Garrison and Muchinsky 1977; Watson 1981). The reason may be marriage

imposes increased responsibilities that may make a steady job more valuable and

important. And job satisfaction is required to have a steady job. Many, in such cases,

strive to coup up or adjust them with the facets they are dissatisfied with. A separate
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stream of the literature has analyzed the impact of marital status on financial choices (see,

among others, Waite and Gallagher, 2000 and Lupton and Smith, 2003). Other

contributions have considered marital status and gender jointly. For example, Sundén and

Surette (1998) point to the interaction between gender and marital status in determining

the allocation of assets in retirement savings plans, with single women exhibiting a more

cautious attitude. Jianakoplos and Bernasek (1998) find that single women exhibit

relatively more risk aversion in financial decision making than single men. Barber and

Odean (2001) report that the differences in portfolio turnover and net return performance

are larger between the accounts of single men and single women than between the

accounts of married men and married women. Schmidt and Sevak (2006) document large

differences in American households' wealth accumulation by gender and marital status.

Zissimopoulos et al. (2008) show that the large differences in wealth accumulation

between single and married women cannot be explained by observable characteristics.

While the above studies focus on the United States, Christiansen et al. (2006) show that

Danish single females have a lower propensity to invest in risky assets.

Globalization and international trade requires countries and their economies to

compete with each other. Economically successful countries will

hold competitive and comparative advantages over other economies, though a single

country rarely specializes in a particular industry. This means that the country's economy

will be made of various industries that will have different advantages and disadvantages

in the global marketplace. The education and training of a country's workers is a major

factor in determining just how well the country's economy will do.
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The study of the economics of training and education involves an analysis of the

economy as a whole, of employers and of workers. Two major concepts that influence the

wage rate are training and education. In general, well-trained workers tend to be more

productive and earn more money than workers with poorer training.

Kohlberg (1981) theorizes that people who better understand complex and

nuanced issues will display more sophisticated levels of moral reasoning. Grounded in

this view, researchers frequently hypothesize positive relationships between education

and ethical judgment. Empirically, the evidence does not appear to support this view.

Many studies fail to find a link between education and ethical judgments (Swaidan et al.,

2003), while others report negative relationships (Chiu, 2003). Although these empirical

results might seem contrary to Kohlberg's theory, they may actually support it. Higher

levels of education might encourage people to more fully consider alternate perspectives

or extenuating circumstances rather than judging complex ethical issues in narrow

absolute terms. If so, a negative relationship between education and strictness of ethical

judgments could be explained under Kohlberg.

Investigating the relation between firm age and performance would seem to be

relevant for both theory and practice. An answer would tell us whether firms are able to

put in place the proper incentives and find the ways to constantly renew themselves, a

feat that living organisms are unable to accomplish. If performance declines as firms

grow older, it could explain why most of them are eventually taken over (Loderer,

Neusser, and Waelchli,2009).

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Many small businesses started as a hobby or side business use cash basis

accounting. This accounting method records and recognizes transactions when cash

changes hands. It provides entrepreneurs with a simple method for maintaining

accounting information. As companies grow and expand, they may need to change to the

accrual accounting method. Accrual accounting is the most widely used method in

business; it records and recognizes transactions as they occur, regardless of cash

changing hands. (Vitez, 2013)