VIABILITY OF BASIC ACCOUNTING TECHNIQUES

The Viability of Basic Accounting Techniques to the Operation and Survival of

SME’s in Tacloban, City

Dominic Earl M. Ablanque ACCTRES-365

Rowena C. Flores ACCTRES-364
Rosalyn B. Gayoso ACCTRESS-364
Rhealyn P. Ladera ACCTRES-364
Ma. Dolores S. Orot ACCTRES-364
Saint Paul School of Professional Studies

October 2021

Author Note

Dominic Earl M. Ablanque, Rowena C. Flores, Rosalyn B. Gayoso, Rhealyn

P. Ladera, Ma. Dolores S. Orot, Saint Paul School of Professional Studies.

Correspondence concerning this paper should be addressed to Dominic Earl

M. Ablanque, Rowena C. Flores, Rosalyn B. Gayoso, Rhealyn P. Ladera, Ma.

Dolores S. Orot, Saint Paul School of Professional Studies, Campetic, Palo, Leyte

6501. E-mail: 20181257@spsps.edu.ph, 20181224@spsps.edu.ph,

20180925@spsps.edu.ph, 20180929@spsps.edu.ph, 20181031@spsps.edu.ph.

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Abstract

Small- Scale enterprises are almost in every community in a country,

especially in the Philippines. They cannot be uniquely defined. It is distinctly defined

in terms of the characteristics, geographical location, and economic environment

where the business operates. The study found out that among the 209 SME's subject

in the study 77% affirm that they have viable accounting techniques employed in their

business. The study found out the level of awareness thru a survey of the SME's

concerning the accounting techniques employed. 50% have said that they are

knowledgeable with the accounting practices they are using, 48% percent are also

knowledgeable about the accounting system used, also 48% for the accounting

principles, and 45% for the accounting controls. It was found out here that there is a

strong positive relationship between basic accounting techniques and SME's operation

and survival. The actual frequency in the data table shows that most businesses

answered that the accounting techniques applied are effective and helpful in the

course of their operation and survival. It did disprove the null hypothesis of the

research and prove the claim of the alternative hypothesis.

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

The Viability of Basic Accounting Techniques to the Operation and Survival of

SME’s Tacloban, City

Small Medium Enterprises (SME's) are duly recognized globally due to their

role in economic advancement in various ways such as; generation of wealth,

employment opportunities, and reduction of poverty. SME's are viewed as an

important part of the economic fabric in most developing countries, and they portray a

big role in stimulating growth, innovation, and success. Consistent with the case study

conducted by the Lagos State University in Nigeria, notwithstanding their size, SME's

are the foremost important enterprises within the economy because when all the

individual effects are aggregated, they can exceed that of the larger companies. The

social and economic advantages of small and medium-scale enterprises can't be

overstated. According to the new millennium, SME's accounted for 95% of firms and

60-70% of employment creation in the majority of the countries within the globe

(OECD, 2000). Small and Medium Scale Enterprises are mostly found within the

service sector of various economies which in most countries account for two-thirds of

employment levels. Being highly innovative, cause the utilization of our natural

resources which successively translates to increasing the country's wealth through

higher productivity. Small and medium scale enterprises have undoubtedly improved

the quality of living of many people especially those within the agricultural areas

(Ariyo, 2005).

The primary motive of an individual that engages in business is to earn profit.

Creating job opportunities for others by employing them is an incidental aspect

considered in starting up a business. In some cases, the owner or the proprietor

himself is the one who manages his own business. Accounting helps the proprietor to

understand what proportion of profit his business makes. By putting into records the

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

income earned and therefore the expenses being purchased is already an easy

accounting, but risks are inherent to each commercial activity so that the results of the

operations might not always end up be needless to say. Business sometimes suffers

setbacks and thereby incur losses. Accounting provides management with the

knowledge essential to the efficient conduct and evaluation of its activities (Lopez,

2016). Accounting techniques may be a crucial tool for recording, analyzing,

monitoring, and evaluating the financial state of organizations, preparation of

necessary documents for tax purposes, providing essential information support to

several other organizational functions (Amidu et al., 2011). Under the context of

SMEs, accounting techniques is salient because it can help the firms in managing

short-term problems in intricate areas like costing, expenditure and income, by

providing information to support monitoring and control for day to day operation of

the business.

In developing countries like the Philippines, the importance of SMEs in the

process of social-economic development should not be discounted. The SMEs are

vital to the Philippines’ economy in that a significant fraction of their production is

sourced locally, thus reducing the weight on the limited foreign exchange earnings.

Many characteristics of small and Medium enterprises have long been recognized.

The SMEs segment, however, has several significant problems that deter it from

achieving its goals.

According to the research of the Small and Medium Scale Enterprises Development

Agency of Nigeria (SMEDAN), the mortality rate of SMEs is very high. In the said

place, 80% of the SMEs ceases to operate before their 5 th anniversary, another smaller

percentage results in extinction between 6th and 10th year, thus only 5% to10% of

SMEs survive and strive to grow. Among the factors that have been identified are

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

poor accounting techniques, lack of concrete record-keeping, inadequate accounting

information and procedures, lack of finance, weak institutional capacity, lack of

managerial skills and training of SMEs, and other tax-related issues.

The main purpose of this research is to assess the viability of basic accounting

techniques to the operation and survival of SMEs focusing on the Philippine context,

more specifically in the Downtown area of Tacloban City. Given the complexity of

the business world, being knowledgeable of basic accounting techniques as the

language of every business is essential for SMEs' operation, especially on its

financing and vital decision-making. Now that COVID-19 affected almost all forms

of business, awareness, knowledge, and viability of the basic accounting is the

backbone that will leverage the enterprises in proper decisions to make in day-to-day

operation and survival.

Literature Review

Small- Scale enterprises are in almost every community in a country. They

cannot be uniquely defined. It is distinctly defined in terms of the characteristics,

geographical location, and economic environment where the business operates. In

terms of Megginson et al.; (1994), “what may be viewed as a small business in a

developed country in Europe, may be viewed as a large industry in a less

industrialized country in Africa.” In terms of workforce size, Broom et al.; (1993)

view a small-scale business as a firm employing less than a hundred workers.

In the Philippines, Small businesses are defined according to their assets,

equity capital, and the number of employees. As amended by RA 8289, and further

revised by RA 9501, The Magna Carta for Micro, Small and Medium Enterprises (RA

No. 6977) states that a small business is any organization or business activity involved

in the significant sectors of the economy such as manufacturing, service, trade,

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

practice of a profession, agri-business and operation of tourism-related

establishments, whether sole proprietorship, partnership, cooperative or corporation,

whose total assets, inclusive of those arising from loans but then exclusive of the land

on which the particular business entity’s assets are located, are ranging from more

than P3,000,000 to P15,000,000. If the total assets stated above amount to P3,000,000

or less, they could be considered micro businesses, and if ranging from more than

P15,000,000 to P100,000,000, they can be regarded as medium enterprises.

Businesses can be defined according to the number of employees. Micro

Businesses usually employ less than ten (10) workers, while small businesses use 10

to ninety-nine (99) workers. Furthermore, medium enterprises employ 100 to 199

workers, while companies hiring 200 employees and above could be considered large

businesses.

Cash basis: Under this system, the actual cash receipts and the actual cash

payments are recorded at the time the transaction happens. Transactions made on

account are not recorded until the cash payments are received or the invoice is paid.

The cash basis system does not make a complete record of financial transactions

during the period as it does not record unsettled transactions like outstanding expenses

and outstanding incomes.

The system is based on a record of actual cash receipts and actual cash

payments. It will not be able to disclose correct profit or loss for a particular period

and will not show the accurate financial position of the business on a specific day.

Accrual basis: Under this system, all transactions relating to a period are

recorded in the books of accounts. In addition to actual cash receipts and cash

payments, account receivable and account payable are also recorded. This system

gives a complete representation of the business’ financial transactions as it makes a

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

record of all transactions relating to a period. The system is based on an entire history

of the financial transactions, discloses correct profit or loss for a particular period, and

exhibits the business’s actual financial position on a specific day.

Bookkeeping. Bookkeeping is the recording of business transactions in a

systematic and orderly manner. On the other hand, accounting is the identification,

analysis, and interpretation of business records for decision-making purposes. There

are two basic types of bookkeeping systems: single entry and double-entry systems.

Single Entry Bookkeeping. According to Eric and Gabriel (2012), A Single

entry system is an “informal” bookkeeping system where a user of this method makes

only one entry to record a business transaction. It includes a daily summary of cash

receipts and a monthly record of receipts and disbursement. A checkbook is a single

entry bookkeeping system where one entry is made for each deposit or check is made.

Receipts are recorded as a deposit and a source of revenue. Issued Checks and

withdrawals are recorded as expenses. Although a single-entry system is acceptable

for tax purposes, it doesn’t provide all the financial information needed to sufficiently

report the financial affairs of a business during that period. According to Barbara

(2010), in addition to the checkbook, this system uses a cash receipts journal and a

cash disbursements journal. All transactions are recorded in their respective journals.

The flow of income and expenses is recorded and is applied for small businesses,

especially those that have just started.

Double-Entry Bookkeeping. The double-entry accounting system records

financial transactions related to assets, liability, income, or expense through

accounting entries. The double-entry accounting system has two effects: the

increasing one account and the other one is decreasing by the same equal amount. The

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

double-entry bookkeeping system guarantees that the financial transaction has

identical and reverse effects in two

(2) different accounts. Accounting entries use terms debit and credit to avoid

confusion with regards to the reverse effect. So if an accounting entry debits a specific

account, the opposite account will be credited, and the other way around (Williams et

al., 2008). According to Alvaro (2010), recording a transaction needs recording what

is received and what is given up, and; recording a transaction requires the observing

of two changes every time a change in property occurs, and an entry is made; hence

the terminology "double-entry record method." It is vital to observe the relationship

between the left side and right side of entries.

Role of accounting techniques on small and medium enterprises. The role

of accounting techniques in business is to help interested parties (internal and

external) to make sound business decisions. The accounting process comprises

measuring and summarizing business activities, interpreting financial information,

and communicating the results to management and other decision-makers.

Financial accounting techniques generate some of the critical small-scale

business documents, including profit and loss statements. Profit and loss show the

financial details of a business over a specific period. Financial accounting techniques

also produce the balance sheet, which provides a snapshot of the assets, debts, and

equity of a company at an exact moment in time. Financial accounting techniques also

help the small business owner in the business to be able to more efficiently by

providing them interpretations of financial information, which may include monthly

management reports presenting costs and profits against sales. Reporting can be

modified for the exact needs of the organization. Without these financial documents,

it would not be easy to run the business or to make decisions regarding the interaction.

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Most economic enterprises in this sector are facing an increasingly high

demand for accounting information, which is managed through the informational

system. The accounting techniques represent the basis for determining the economic

indicators regarding all economic and financial operations and for all transactions; it

also provides the certainty needed to develop reliable forecasts.

Small and medium-scale business growth is carefully outlined in the enterprise

business plan. When the small and medium scale business plans its development,

firstly, it looks at past or historical accounting data to understand the trends in revenue

production and understand how the small and medium scale business spends money.

Accounting techniques are critical in determining how much the small and medium

scale business can take on in liabilities and costs as it attempts to make the right

decisions on how to expand profitability.

Finally, the continuous flow of accounting data relevant to income, purchases,

investments, and overhead is critical in determining the budget for the coming year.

The information gathered by the owner of the business is used as a starting point to

measure actual performance for the year and understand the basic costs of the

business operations. Revenue projections for the next fiscal year are added to the

accounting data to create the small and medium scale business’s budgets.

Theoretical Framework

This segment provides three theories developed by scholars that were regarded

as relevant to understanding the viability of accounting techniques: bookkeeping, cash

basis, or accrual basis on the growth of SMEs. The following are the theories relevant

to the study: Information Theory, Decision-making Theory, and Measurement

Theory.

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Information Theory. The key function of accounting techniques is to create a

communication between the business and users/owners and to create a communication

it needs to have data. Accounting statements are statements to educate and be able to

generate a good decision to managers, owners of small businesses, and external users

about the financial aspects of their companies. Accounting systems are essentially

information systems, hence they are the primary formal basis for financial choices

(Freeman, 2008).

Under this theory, Information is the binding key factor as a resource in this

approach, with costs associated with its collection, processing, and transmission. As

the amount of data grows, so does the cost of storing it. As a result, it's critical to link

the information creation process to the costs connected with it. Data becomes

accounting information only when it is assessed, measured, and restricted by the

criteria of relevance, verifiability, freedom from bias, and quantifiably, according to

Holmes and Nicholls (1988). These terminologies can be thought of as the properties

that define the internal boundary of accounting information.

Decision Theory. The relevance of this theory is self-explanatory, it discusses

how and why a business owner/ information users evaluate their situation and enter

into a consensus of sound-minded, logic-backed, and considering variables plan,

action and activity. The theory states that decision-making is a conscious appraisal of

various choices that leads to the optimal result or optimizes the desired aim, rather

than an intuitive process. In other words, decision theory is not only processed by a

mere hunch or guess but rather uses past experiences or testimonies and mathematical

equations like ratios and percentages to examine and justify the interconnection of the

versatile events and variables that will help SMEs to assess on its day-to-day activity.

In reality, accounting activities are linked with managerial analysis since, as an

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

information system, it offers substantially useful information about the business for

both internal and external financial reporting (Freeman, 2008).

Measurement Theory. This theory correlates to accounting techniques as

accounting uses a measurement of currency, time, and date that provides a hands-

down understanding of the data and information written in the books in evaluating

values. To define measurement; Measurement is the process of giving numerical

values to things or occurrences based on a set of principles. Preparing and presenting

financial statements uses the measurement theory as it uses measurement to provide

calculations in determining the value of each account. The initial step in bookkeeping

is to choose the object to be recorded and their value (Holmes & Nicholls, 1988).

Although measurement is typically defined as the application of numerals to

objects or events following the rules, in the context of accounting, measurement refers

to financial attributes of economic events known as accounting valuations, which

simply entails assigning numbers to assets and liabilities and ranking them in order of

priority (Haber, 2004).

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Conceptual Framework

Figure 1.

Conceptual Framework of the study

Basic Accounting Techniques SMEs Operation and Survival

Note. The figure shows the conceptual framework of the study. The research

employs two variables, Basic Accounting Techniques as the independent variable and

SMEs operation and survival as the dependent variable. Basic accounting techniques

are referred to as the crucial tool for recording, analyzing, monitoring, and evaluating

the financial state of an organization, preparation of necessary documents for tax

purposes, and providing essential information support to several other organizations.

Accounting techniques is salient because it can help the firms in managing short-term

problems in intricate areas like costing, expenditure and income, by providing

information to support monitoring and control for day to day operation of the

business. Thus, SMEs Operation and Survival as the dependent variable is the

resulting factor of the proper application of basic accounting techniques incorporated

by the SMEs. Sound knowledge and viability of these techniques equate to sound

decision-making of the enterprise.

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Research Questions

This study aims to assess the viability of accounting techniques to the

operation and survival of SMEs in Downtown Area Tacloban City. It aims to answer

the subsequent questions:

1. What is the profile of the respondents with regards to:

1.1 Type of the Business Organization

1.2 Nature of the Business

1.3 Years of Operation

1.4 Capital of the business

2. Are basic accounting techniques viable for the operations and survival of

SMEs in Tacloban City?

3. What basic accounting techniques are being applied in the operation of the

business with regards to:

3.1 Accounting Methods

2.2 Accounting System

3.2 Accounting Principles

3.3 Accounting Controls

4. What is the level of Knowledge of SMEs on the accounting techniques

employed?

5. Is there a significant relationship between the basic accounting techniques and

SME's operation and survival?

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Research Hypotheses

Based on the problem stated, the study tests the following null hypotheses:

1. Ho: There is no significant relationship between the basic accounting

techniques and SME's operation and survival.

Method

Participants

The target population was 250 small-medium enterprises in the downtown

area, Tacloban, City. These were selected depending on the type of business that is

Retail shops, manufacturing sector, and other service providers with identification

numbers. A total of 209 respondents actively participated in the survey. A stratified

sampling procedure was used in determining the sample size in this study. This

technique was employed to ensure a fairly equal representation from all the categories

aforementioned. Respondents were grouped into strata. To get the information from

small-scale business owners, the researcher used purposive sampling in each stratum

and simple random sampling was used to limit the bias of purposive sampling.

Research Design

Research design is an organized and structured procedure that guides the

researcher on the collection and analysis of data (Bryman & Bell, 2007). The

components of a research design depend on the type of research, its scope, and the

extent of its objectives. A limited purpose or a micro research project might have a

simple research design; whereas research with multiple objectives (macro research)

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

might have a more complex research design. A subjective criterion may therefore be

not overruled in the designing of research.

This study employed a descriptive research design to accomplish the major

objective which is to examine the viability of accounting techniques to the operation

and survival of SMEs in the Downtown Area of Tacloban, City. These research

designs enabled the researchers to collect as many options as possible from the

respondents. Descriptive research design systematically and accurately describes a

population, or a certain phenomenon(Combes,2020). The descriptive method which is

the survey questionnaire was used to evaluate the knowledge levels of accounting

techniques among small business owners and how this affects the operation and

survival of SMEs in the Downtown Area of Tacloban, City.

Measures

This study used survey questionnaires as a principal tool in gathering and

collecting data. The questionnaires were formulated by the researchers through

brainstorming, deliberation, and continuous revisions when founded by the

researchers to be necessary to do so. The questionnaire has three (3) parts: Part 1

asked the profile and background of the respondents including the nature and type of

business, years of operation, and capital of the business. The second part, the

accounting techniques applied in the business including the accounting practices,

accounting system, principles, and accounting controls. The last part was about the

knowledge of the accounting techniques employed and their effectiveness to SME's

operation and survival.

Procedures

Before the conduct of the study, the researchers requested from the

Department of Trade and Industry (DTI) the lists of registered Small-Medium

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Enterprises in Tacloban, City. The approved request was used as a reference in

selecting the respondents. For the validation of survey questionnaires, researchers

asked academic assistance from an accounting professor. Upon validation, researchers

sent a letter asking permission from the owner, bookkeeper, manager, or in charge to

allow the researcher to use their time for the administration of the questionnaire.

Following health protocols, the researchers personally conducted the data-

gathering to ensure completeness, consistency, and accuracy of the data that were

gathered. The researchers made sure that all items in the questionnaire were filled out

and if there are items that seem missed out, they resort to probing by asking the

questions that enable them to get the exact answers to the questions. The researchers

avoided leading questions so that the respondents give their responses.

Statistical Treatment of Data

The gathered data were subjected to data processing, both manual and

machine processing. In the statistical treatment of the data, both descriptive and

inferential statistical tools were employed to answer the questions and hypothesis

under this study. The descriptive statistical tools included the frequency count and

percentage. The chi-square test is the inferential statistical tool that was utilized in this

study to test the hypothesis of this study.

Frequency Count and Percentage. The frequency of occurrence by each of the

demographic characteristics of the respondents was considered and the magnitude of

its occurrence concerning the total samples was calculated using these tools. This was

also used to describe the viability of the basic accounting techniques to the operation

and survival of SMEs in the Downtown Area of Tacloban, City.

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Chi-squared test. The chi-squared test checks the difference between the

observed value and the expected value. Chi-Square shows or in a way checks the

relationship between two categorical variables which can be can be calculated by

using the given observed frequency and expected frequency. The formulae are given

as;

χ2 = ∑(Oi – Ei)2/Ei

where

Oi = observed value (actual value)

Ei = expected value.

The decision rule: The test is carried out at a 0.05 level of significance and the

degree of freedom is 2. The rule is that the critical value of chi-square is less than the

computed values of chi-square, the null hypothesis (Ho) should be rejected while the

alternative hypothesis (HI) should be accepted. On the other hand, if the critical value

of chi-square is greater than the computed value of chi-square. The null hypothesis

(Ho) should be accepted while the alternative hypothesis (HI) should be rejected.

For precision and accuracy in the data processing, the researchers used the

computer as an additional in the data processing, and analysis tool pack add-ins

Microsoft Excel 2010.

Results

This chapter presents the data collected in the course of the study, analysis,

and interpretation of such data regarding the study's subject about the viability of

basic accounting techniques to the operation and survival of SMEs in the Downtown

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Area of Tacloban, City. Data gathered are significant to the study, it will then

emphasize the statement of the problem and the hypotheses of the study in

formulating the discussion of the data examined.

The researchers employed a total of 250 survey questionnaires among the

small-medium enterprises (SMEs) in the Downtown Area of Tacloban, City, of which

only 209 respondents have returned and completely answered, while the remaining 41

was not returned. The distribution of their responses is shown below.

Location Frequency Percentage

Justice Romualdez 43 20.57%

Rizal Avenue 29 13.88%
Burgos 11 5.26%
Zamora 20 9.57%
Del Pilar 24 11.48%
Gomez 12 5.74%
Paterno 13 6.22%
Sto. Niño Ext. 7 3.35%
Juan Luna 6 2.87%
Avenida Veteranos 28 13.40%
Senator Enage 16 7.66%
Total 209 100.00%

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

I. PROFILE AND BACKGROUND OF THE RESPONDENTS

Table 2.

Does the business have an Accounting Professional/ Bookkeeper?

Response Frequency Percentages (%)

YES 162 78%

NO 47 22%

No answer 0 0%

Total 209 100%

The above table shows 162 responses which represent 78% of the total

respondents who have an Accounting Professional/Bookkeeper. The

remaining 47 respondents which is equal to 22% of the population.

Table 3.

Is the Accounting Staff Licensed or Certified?

Response Frequency Percentages (%)

YES 138 66%

NO 47 33%

No answer 2 1%

Total 209 100%

Table 3 shows that 138 of the respondents’ Accounting Staff/

Bookkeeper which is 66% of the total is licensed or Certified, 47 (33%) of

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

which are not Licensed or Certified, while the remaining 2 which is equivalent

to 1% did not render a response to this part of the questionnaire.

Table 4.

Type of Business

Type of Business Frequency Percentages (%)

Service 71 34%

Merchandising 116 56%

Manufacturing 22 11%

Total 209 100%

Table 4 shows the distribution of the SMEs as to their type. 71 of them

or 34% of the total are Service providers, while 116 (56%) are Merchandising

types of business, and the remaining 22 or 11% out of the 209 total

respondents are Manufacturing businesses.

Table 5

Nature of the Business

Nature of the Business Frequency Percentage

Sole Proprietorship 194 93%

Partnership 6 3%

Corporation 9 4%

Total 209 100%

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Based on Table 5, 194 respondents are sole proprietorship as a nature

of the business with 93 percent, 6 respondents are a partnership with 3 percent,

and there are 9 respondents are a corporation with 4 percent out of 209

respondents.

Table 6

Years of Operation

Years of Operation Frequency Percentage

Less than 1 year 21 10%

1 year to 5 years 106 51%

6 years to 10 years 46 22%

More than 10 years 36 17%

Total 209 100%

Table 6 shows that 21 respondents are in less than 1 year of operation

with 10 percent, 106 respondents are in 1 year to 5 years of operation with 51

percent, 46 respondents are in 6 years to 10 years of operation with 22 percent,

and there are 36 respondents are in more than 10 years of operation with 17

percent out of 209 respondents.

Table 7

Capital of the Business

Capital of the Business Frequency Percentage

Less than 500,000 94 45%

1,000,000 - 50,000,000 102

49%

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

50,000,000 - 100,000,000 12 6%

More than 100,000,000 1 0%

Total 209 100%

As shown in Table 7, there are 94 respondents with less than 500,000

capital with 45 percent, 102 respondents with 1,000,000 to 50,000,000 capital

with 49 percent, 12 respondents with 50,000,000 to 100,000,000 capital with 6

percent, and only 1 respondent with more than 100,000,000 capital of the

business with 0 percent out of 209 respondents.

II. ACCOUNTING TECHNIQUES APPLIED IN THE BUSINESS

Table 8.

Are there any basic accounting techniques that are viable/applied to the business?

Response Frequency Percentages (%)

YES 160 77%

NO 49 23%

Total 209 100%

Table 8 shows that 160 or 77% of the 209 respondents employ

accounting techniques that are viable/applied to the business. The

remaining 49 (23%) say that they do not have any basic accounting

techniques that are viable/applied to their business.

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Table 9.

If not, what are the means used in recording and monitoring business

transactions?

Responses: Frequency Percentages

Company Established System 0 0%

Traditional/ Customize 46 94%

Specified reasons of the respondents

We just record the sales and expenses 1 2%

Simple add and Minus 1 2%

We don’t maintain books for our day to 1 2%

day transaction

Total 49 100%

Table 9 shows the means used in recording and monitoring business

transactions by the SMEs/respondents that do not have any basis accounting

techniques that are viable/applied to the business as stated in table 7. Out of

the 49 respondents, no one answered about the option that the company has an

established system. While 46 (94%) of the total said that they employ a

traditional/customized way of recording and monitoring business transactions.

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Other respondents have specified other reasons, 1 (2%) said that they just

record their sales and expenses, also 1 (2%) said that they simply add and

minus, and 1 (2%) they don’t maintain books for their day to day transactions.

Table 10.

Frequency of Reporting using the accounting techniques prepared for in the business.

Frequency of Reporting Frequency Percentage

Weekly 2 1%

Monthly 53 33%

Quarterly 36 23%

Annually 69 43%

Total 160 100%

Table 10 shows the frequency of reporting using the accounting

techniques prepared for in the business. Among the respondents (160

respondents) that answered “yes” as to the viability of accounting techniques

to their business shown in table 7, 2(1%) has a weekly frequency, 53 (33%)

monthly frequency, 36 (23%) quarterly frequency, and 69 (43%) annual

frequency.

Figure 2.

Accounting Methods

Installment 33

Accrual Basis 40

Cash Basis 152

10 30 50 70 90 110 130 150

Cash Basis Accrual Basis Installment 24
Frequency 152 40 33
Percentage 0.926829268292683 0.24390243902439 0.201219512195122
VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Figure 2 shows the graph for the responses on the Accounting Methods

used by the SMEs subjected to the study. 152 respondents (93%) employ cash

basis accounting, 40 respondents (24%) use the accrual basis of accounting

and 33 respondents (20%) use installment basis of accounting in the course of

the operation.

Figure 3.

Estimation of Bad Debts

N/A 2
Percentage of Sales 4
Percentage of Accounts Receivable 13
Aging of Receivables 118
10 30 50 70 90 110
Aging of Percentage Percentage N/A
Receiv- of Ac- of Sales
ables counts Re-
ceivable

Fre- 118 13 4 2
quen
cy
Per- 0.8027210 0.0884353 0.0272108 0.0136054
Percentage Frequency
cent- 88435374 74149659 84353741 42176870
age 9 5 7

Figure 3 shows the responses on the Estimation of Bad debts used, 118

(80%) uses Aging of Receivables, 13 (9%) uses Percentage of Accounts

Receivable, 4 (3%) uses Percentage of Sales and 2 (1) does not employ and

estimation of bad debts in their accounting.

Figure 4.

25
VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Depreciation Method

N/A 22
Group 3
Composite 4
150% Declining Method 2
Double Declining Method 4
Sum of the Years Digit 13
Straight Line 118
10 30 50 70 90 110
Straight
Sum of Double 150% Compos- Group N/A
Line the Declin- Declin- ite
Figure 4 shows the Depreciation
YearsMethod
ing employed
ing by the respondents
Digit Method Method
in depreciating their Property,
Fre- plant, and
118 13 equipment.
4 118
2 (80%)
4 uses3the 22
quen
cy
straight-line method, 13Per-
(9%) uses
0.80272
Sum of the Year's Digit or (SYD), 4 (3%)
0.08843 0.02721
Percentage Frequency0.01360 0.02721 0.02040 0.14965
cen- 1088435 5374149 0884353 5442176 0884353 8163265 9863945
uses Double Declining tage
Method,3742 (1%)
6599uses7415 8707Declining
the 150% 7415 Method,
3061 578
and

another 4 uses the Composite method, while the other 3 (2%) uses the Group

Method, and 22 (15%) does not employ a depreciation method in their

accounting.

Figure 5.

Net Receivable Estimation

N/A 52
53
Allowance for Sales Returns 16
38
Allowance for Sales Discounts 50
5 15 25 35 45 55
Al- Al- Al- Al- N/A
lowanc lowanc lowanc lowanc
e for e for e for e for
Sales Freight Sales Bad
Dis- Charges Returns debts
counts

Fre 50 38 16 53 52
que
Percentage
ncy Frequency
Per 0.3424 0.2602 0.1095 0.3630 0.3561
cen 657534 739726 890410 136986 643835
tag 24658 0274 9589 30137 61644
e

The above figure shows that there are 53 respondents (25%) who

applies Allowance for Bad debts as Net receivable estimation in their business,

there are 16 respondents (8%) who applies Allowance for sales returns, 38
26
VIABILITY OF BASIC ACCOUNTING TECHNIQUES

respondents (18%) applies Allowance for Freight Charges, 50 respondents

(24%) applies Allowance for Sales Discounts, while there 52 respondents

(25%) that do not apply any of the net receivable estimation in their business

out of 146 responses in total. Furthermore, the respondents are instructed to

select any of the given net receivable estimations based on what they apply in

the business.

Figure 6

Business Document

Other (Tickets) 2
Vouchers 61
Invoice 100
Official Receipt 152
10 30 50 70 90 110 130 150
Official Receipt Invoice Vouchers Other (Tickets)

Frequency 152 100 61 2

Percentage 0.9325153374233 0.6134969325153 0.3742331288343 0.0122699386503
13 37 56 067

Percentage Frequency

As shown in Figure 6, there are 152 responses (93%) uses official

receipt as their business documents, there are 100 responses (61%) uses

invoice as well as business documents, while there are 61 responses (37%)

uses vouchers, and there are 2 responses (1%) uses tickets as business
27
VIABILITY OF BASIC ACCOUNTING TECHNIQUES

documents out of 163 responses in total. The respondents are instructed to

select any of the given business documents based on what they use in the

business.

Figure 7.

Payment Methods

72
66
Credit/Debit Card 44
47
Cash 165
10 30 50 70 90 110 130 150 170
Cash Check Credit/ Online
Debit Payment
Card (Gcash)

Fre- 165 47 44 66 72
quen
cy
Per- 0.993975 0.283132 0.265060 0.397590 0.433734
cen- 9036144 5301204 2409638 3614457 9397590
tage 58 82 55 83 36
Percentage Frequency

Based on Figure 4, a total of 165 responses (99%) use cash as the

payment method in the business, there are 47 responses (28%) uses checks, 44

responses (27%) for the usage of credit/debit cards, and 72 responses (43%)

for online payment specifically the use of Gcash as the payment method in the

business out of 166 responses in total. In addition, the respondents were

instructed to select any of the given business documents based on what they

use in the business.

28
VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Figure 8.

Accounting System

Double Entry 90

Single Entry 68

5 15 25 35 45 55 65 75 85
Single Entry Double Entry
Frequency 68 90
Percentage 0.430379746835443 0.569620253164557

Percentage Frequency

Figure 8 shows the accounting system used in the business. A total of

68 responses (43%) selected single entry, while there are 90 responses (57%)

selected double-entry out of 158 responses.

Figure 9.

Accounting Principle

29
 VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Completeness 93
Consistency 99
Timeliness 88
Understandability 61
Relevance 67
Expenses Recognition 87
Revenue Recognition 96
Historical Cost 30
Entity Concept 60
Going Concern 112
10 30 50 70 90 110
Going Entity Histori- Revenue Expenses Rele- Under- Timeli- Consis- Com-
Concern Concept cal Cost Recogni- Recogni- vance stand- ness tency pleteness
tion tion ability

Fre- 112 60 30 96 87 67 61 88 99 93
quen
cy As shown in Figure 9 there are
Percentage
112 (72%) responses for the going
Frequency
Per- 0.71794 0.38461 0.19230 0.61538 0.55769 0.42948 0.39102 0.56410 0.63461 0.59615
cent- 8717948 5384615 7692307 4615384 2307692 7179487 5641025 2564102 5384615 3846153
concern accounting principle, 60 responses (38%) for the entity concept
age 718 385 692 615 308 179 641 564 385 846

principle, 30 responses (19%) for historical cost principle, 96 responses (62%)

for revenue recognition principle, 87 responses (56%) for expenses

recognition principle, 67 responses (43%) for relevance principle, 61

responses (39%) for understandability principle, 88 responses (56%) for

timeliness principle, 99 responses (63%) for consistency principle, and 93

responses (60%) for completeness principle out of 156 responses. In addition,

the respondents were instructed to select any of the given accounting

principles based on what they apply in the business.

Figure 10.

Accounting Controls

104
Use computers in accounting 60
67
Prepares budget 101
145
Records daily expenditures 135
120
Company deposits cash/ maintains bank account 128
10 30 50 70 90 110 130 150
Com- Ac- Record Record Pre- Pays Use Uses
pany coun- s daily s Daily pares payabl com- Man-
de- tant expen- Sales budget e when puters ual ac-
posits pre- ditures due in ac- count-
cash/ pares count- ing
main- finan- ing
tains cial 30
bank state-
ac- ments
count
Fre 128 120 135 145 101 67 60 104
 y
Per 0.8101 0.7594 0.8544 0.9177 0.6392 0.4240 0.3797 0.6582
Percentage
cen 26582 Frequency
93670 30379 21518 40506 50632 46835 27848
tag 27848 88607 74683 98734 32911 91139 44303 10126
VIABILITY OF BASIC ACCOUNTING
e 1 TECHNIQUES
6 5 2 4 2 8 6

Based on the above Figure, there are 128 (81%) responses that the

company deposits cash/maintains a bank account, 120 (76%) responses that the

accountant of the entity prepares financial statements, 135 (85%) responses that

the entity records daily expenditure, 145 (92%) responses that the entity records

daily sales, 101 (64%) responses that they prepare a budget, 67 (42%) responses

that the entity pays payable when due, 60 (38%) responses that the entity use

computers in accounting, and 104 (66%) responses that the entity uses manual

accounting.

III. KNOWLEDGE TO THE ACCOUNTING TECHNIQUES

EMPLOYED AND ITS EFFECTIVENESS TO THE SMEs
OPERATION AND SURVIVAL
Figure 11.

How knowledgeable are you with the accounting practices you employed?

31
VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Insufficient 4
Sufficient 63
Knowledgeable 82
Expert 12
5 15 25 35 45 55 65 75 85
Expert Knowledgeable Sufficient Insufficient

Frequency 12 82 63 4
Percent- 0.07361963190 0.50306748466 0.38650306748 0.02453987730
age 18405 2577 4663 06135

The figure shows thatPercentage

there are 12 (7%) responses selected as an expert
Frequency

with the accounting practices they employed, there are 82 (50%) responses for

knowledgeable, 63 (39%) responses for sufficient, and 4 (2%) for insufficient.

Figure 12.

How knowledgeable are you with the accounting system you employed?

Insufficient 5
Sufficient 70
Knowledgeable 79
Expert 12
5 15 25 35 45 55 65 75
Expert Knowledgeable Sufficient Insufficient

Frequency 12 79 70 5
Percentage 0.0727272727272 0.4787878787878 0.4242424242424 0.0303030303030
727 Percentage 79Frequency 24 303

Based on the figure, there are 12 (7%) responses selected as an expert

with the accounting practices they employed, there are 79 (48%) responses for

knowledgeable, 70 (42%) responses for sufficient, and 5 (3%) for insufficient.

Figure 13.

32
VIABILITY OF BASIC ACCOUNTING TECHNIQUES

How knowledgeable are you with the accounting principles you employed?

Insufficient 11
Sufficient 62
Knowledgeable 80
Expert 12
5 15 25 35 45 55 65 75
Expert Knowledgeable Sufficient Insufficient

Fre- 12 80 62 11
quency
Percent- 0.0727272727 0.4848484848 0.3757575757 0.0666666666
age 272727 48485 57576 666667

Percentage Frequency

The figure above shows that there are 12 (7%) responses selected as an

expert with the accounting principles they employed, there are 80 (48%)

responses for knowledgeable, 62 (38%) responses for sufficient, and 7 (11%)

for insufficient.

Figure 14.

How knowledgeable are you with the accounting controls you employed?

33
VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Insufficient 11
Sufficient 66
Knowledgeable 74
Expert 14
5 15 25 35 45 55 65 75
Expert Knowledge- Sufficient Insufficient
able
Frequency 14 74 66 11
Percent- 0.0848484848 0.4484848484 0.4 0.0666666666
age 484849 84849 666667

Percentage Frequency
Figure No. 14 shows that there are 14 (8%) responses selected as an

expert with the accounting principles they employed, there are 74 (45%)

responses for knowledgeable, 66 (40%) responses for sufficient, and 7 (11%)

for insufficient.

Figure 15.

How do you rate the effectiveness of these accounting techniques in the

operation of your business?

34
VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Not Effective 0
Neutral 26
Effective 110
Highly Effective 29
10 30 50 70 90 110
Highly Effec- Effective Neutral Not Effective
tive
Fre- 29 110 26 0
quency
Percent- 0.1768292682 0.6707317073 0.1585365853 0
age 92683 17073 65854

Figure No. 15 shows that thereFrequency

Percentage are 29 (18%) responses that rate the

effectiveness of these accounting techniques to the operation of their business

as highly effective, there are 110 (67%) as effective, 26 (16%) as neutral, and

no one (0%) for not effective.

Figure 16.

How do you rate the effectiveness of these accounting techniques to the

survival of your business?

Not Effective 0
Neutral 26
Effective 110
Highly Effective 29
10 30 50 70 90 110
Highly Effec- Effective Neutral Not Effective
tive
Fre- 29 110 26 0
quency
Percent- 0.176829268 0.670731707 0.158536585 0
age 292683 317073 365854

Percentage Frequency
The above figure shows that there are 29 (18%) responses that rate the

effectiveness of these accounting techniques to the survival of their business

as highly effective, there are 110 (67%) as effective, 26 (16%) as neutral, and

no one (0%) for not effective.

35
VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Figure 17.

Does applying these accounting techniques helpful in business operation?

Disagree 0
Neutral 13
Agree 117
Strongly Agree 37
10 30 50 70 90 110
Strongly Agree Neutral Disagree
Agree
Frequency 37 117 13 0
Percentage 0.2242424242 0.7090909090 0.0787878787 0
42424 90909 878788

Percentage Frequency

Based on the figure, there are 37 (22%) responses who strongly agree

that applying these accounting techniques are helpful in the business

operation, there are 117 (71%) responses who agree, 12 (7%) responses are

neutral, and no one (0%) disagree.

Figure 18.

Does applying these accounting techniques helpful in business survival?

36
 VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Disagree 0

Neutral 13

Agree 117

Strongly Agree 37
10 30 50 70 90 110
Strongly Agree Agree Neutral Disagree
Frequency 37 117 13 0
Percentage 0.224242424242424 0.709090909090909 0.078787878787878 0
8

Percentage Frequency

The figure above shows that there are 37 (22%) responses who

strongly agree that applying these accounting techniques are helpful in the

business survival, there are 117 (71%) responses who agree, 12 (7%)

responses are neutral, and no one (0%) disagree.

TESTING HYPOTHESIS

The hypothesis formulated in chapter one will be tested using the chi-square test. The
test will be based on available responses obtained from the questionnaire.

The formulae are given as;

χ2 = ∑ (Oi – Ei)2/Ei

where,

Oi = observed value (actual value)

Ei = expected value.

HYPOTHESIS 1

37
 VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Ho: There is no strong positive relationship between accounting techniques and

SME's operation and survival.

Hi: There is a strong positive relationship between basic accounting techniques and

SMEs operation and survival

NOTE: Question one (1) Part III.B of the questionnaire was used in testing hypothesis

one (1).

Table 11.

Chi-Square Test on the Hypothesis of the Study.

Observed Expected (O-E) (O-E)

(O-E)
(Actual) O (E) ^2 ^2/E

Highly Effective 30 41 -11 121 2.95

Effective 108 41 67 4489 109.49

Neutral 25 41 -16 256 6.24

Not Effective 1 41 -40 1600 39.02

TOTAL 164 164 x^2 value 157.71

No. of Levels (k) 4

Degree of Freedom 3

Level of Significance 0.05

X^2 Critical Value 7.81

As evident from the computation the value of chi-square X2 = 157.72 from the

chi-square table the table value of chi-square at 0.05 level of significance and 3

38
VIABILITY OF BASIC ACCOUNTING TECHNIQUES

degree of freedom is 7.81. Since the calculated value of chi-square is greater than the

critical value of chi-square, the null hypothesis (Ho) which states that "There is no

strong positive relationship between accounting techniques and SMEs operation and

survival” is rejected while the alternative hypothesis is accepted. Therefore, there is a

strong positive relationship between basic accounting techniques and SME's operation

and survival. If we look at the actual frequency in the data table, we see that most

businesses answered that the accounting techniques applied are effective.

Discussion

In the study conducted by Gilbert Kwabena Amoako 2013, it was stated that

SME’s (Small Medium Enterprises) have the most economic contribution to the

development of such developing countries. SME's provides employment opportunities

to almost two-thirds of the countries working for the population while contributing to

the revenue generation to the government by way of paying taxes. Growing SMEs,

according to the claim of Prasad et al. (2001), will also contribute to increasing the

size of the economy's directly productive sector, generating tax revenue for the

government, and, overall, facilitating poverty reduction through fiscal transfers and

income from employment and firm ownership. In the accounting parlance, also in the

study of Gilbert Kwabena Amoako, it was found out that SME's have poor accounting

techniques in their business by which led to various consequences. He asserted that

proper accounting techniques are essential in any business and that it is critical in

tracking all aspects of the business using information from the books/systems. Having

known the crucial effects of SME's especially the effects of basic accounting

techniques to SME's business operations, concerns as to their viability have also

grown. The study aims to examine the viability of basic accounting techniques in the

country's setting specifically in the Downtown area of Tacloban City. This study

39
VIABILITY OF BASIC ACCOUNTING TECHNIQUES

looked into the viability of accounting practices, accounting systems, accounting

principles, and accounting controls to their operation and survival as well as its

effectiveness.

In the study, it was found out that out of the 209 total respondents 78% of

which employ a bookkeeper/accounting professional as shown in table 2, wherein

66% are licensed or certified as shown in table 3. Most of the SMEs are Sole

Proprietorship which is 93% of the total population wherein the majority of them or

56% are Merchandising businesses (refer to tables 4 and 5). As shown in Tables 6

and 7, Most (51%) of the SMEs were operating for 1-5 years now, 49% of them owns

a capital ranging from 1,000,000-50,000,000 in Philippine peso.

The study found out that among the 209 SME's subjects in the study 77%

affirm that they have viable accounting techniques employed in their business (shown

in table 8). In the survey that the researchers conducted, the main question posed was

“Are there any accounting techniques that are viable/applied to the business?”, those

who will answer “yes” will proceed while those who answered “no” were asked as to

the reasons why. As shown in Table 9, the majority of them, or 94% have told that

they have a traditional/customize way of accounting for the transactions of their

business. Moreover, 1 (2%) expressly said that “we just record the sales and

expenses”, another 1 (2%) said that “simple add and minus”, also another 1 (2%) have

told that “We don’t maintain books for our day to day transaction". In line with the

frequency of reporting, almost 43% reports annually as shown in table 10.

Concerning the accounting practices, accounting systems, accounting

principles, and accounting controls employed by the SME's, it has been discovered

that most of them, or 93% (shown in figure 2) use cash basis. This can be due to the

40
VIABILITY OF BASIC ACCOUNTING TECHNIQUES

reason that extending credits may increase the risk of having bad debts on the course

of the operation which is a disadvantage to every business. For those SME's who

extend credit under the Accrual basis, the estimation that most (80%)of them are

using is Aging of receivable. In terms of depreciating their Property, plants, and

equipment 80% use the straight-line method. The said method is the easy and

fundamental way of depreciating PPE's which are less difficult on the part of the

preparers. Allowance for bad is mostly used by the SME's with a percentage of 36%,

since extending credits is also a way of boosting sales, an accrual basis is of help.

However, to adhere to the conservatism theory wherein losses are anticipated

allowances are provided. In figure 6, it is shown that 93% of the SME's has been

using official receipts. Business documents such as this are a vital component in

accounting, they serve as source documents in recording business transactions.

Having these documents will not just facilitate the recording but also in the analysis

and various control measures. As to the Payment methods, it is coherent with the

accounting method that is mostly used which is the cash basis, 99% of the SME's

opted for cash payments.

In figure 8, it has been that 57% percent use the double-entry accounting

system. The said one records both sides of the transaction which is known to be the

debits and credits. This method is beneficial as it will help in reducing errors as both

sides of the transactions are on the records. Thus, it promotes a good check and

balance benefit. As to the accounting principles, 72% or most of the SME's applies

the going concern principle, which means an aim to continue operating the business

indefinitely until there is any evidence to the contrary. Operating for years after years

is the aim of everyone who wishes to start and or manage a business. For SME's it is

indeed a great opportunity for growth and development if given the chance to operate

41
VIABILITY OF BASIC ACCOUNTING TECHNIQUES

in a going-concern. As shown in figure 9, it is followed in sequence as to the

percentages by consistency (62%), Revenue Recognition (62%), Completeness

(60%), Timeliness and Expense Recognition (56%), Relevance (43%),

Understandability (39%), Entity-concept (38%), and Historical cost (19%). In line

with the Accounting Controls, the most viable is the recording of daily sale by which

92% of the SME's has been utilizing. This reflects an important factor in the

accounting since the recording of daily sales will help promote better monitoring of

the costs and expenses that it should cover to arrive at a net profit margin.

Moreover, the study found out the level of awareness of the SME's about the

accounting techniques employed. 50% have said that they are knowledgeable with the

accounting practices they are using, 48% percent are also knowledgeable about the

accounting system used, also 48% for the accounting principles, and 45% for the

accounting controls. The knowledgeable choice is the most favored one, it means that

the preparers are aware of the concepts behind the accounting techniques employed

subject for further improvements. Among the majority, there are also experts when it

comes to the application as shown in figures 11-14. Figures 15 and 16 show the

effectiveness of the accounting techniques used in the operation of the business, of

which it is 67% effective, and at the same time 67% effective as to its survival.

Accounting is the language of every business, but other factors are also important to

be considered in such operation and survival. However, it cannot be denied that

accounting as an art and science is a crucial factor in this matter. Figures 17 and 18

show that it is 71% helpful to the business operation and also 71% helpful in the

survival.

In Table 11, it has been found that there is a strong positive relationship

between basic accounting techniques and SME's operation and survival. The actual

42
VIABILITY OF BASIC ACCOUNTING TECHNIQUES

frequency in the data table shows that most businesses answered that the accounting

techniques applied are effective and helpful in the course of their operation and

survival. It did disprove the null hypothesis of the research and prove the claim of the

alternative hypothesis.

Limitations

Throughout the days of conducting, retrieving, and analyzing the study data,

the study has boundaries that constraints the researchers to fully collect the data which

the study needs to be scrutinized and be interpreted carefully. The following are the

limitations faced in our Study:

 Scope: The scope of the study aims to assess the viability of

accounting techniques to the operation and survival of SMEs in

Downtown Area Tacloban City.

 Budget: The researchers came from different places, namely; Daram

Samar, Guiuan Eastern Samar, Jaro Leyte, Hilongos Leyte and

Abuyog, Leyte. Conducting the research was very costly especially

since the researchers had to rent a place to maximize the stay in the

area of the study.

 Time Allotment: The period given to gather and conduct the research

is pressured with the effects of the pandemic. The researchers were not

able to collect all the survey questionnaires because of exposure

constraints.

 During the Covid-19 Pandemic: The study was carried out during the

trying times of the Philippines due to CoVID-19 restriction and force

43
VIABILITY OF BASIC ACCOUNTING TECHNIQUES

closure of other businesses due to the lack of customers which the

researchers believe to have a significant role to the entities surveyed.

 Safety Protocols: Due to the rampant spread of CoVID-19, Tacloban

City implemented health protocols to alleviate the spread of the virus

that has affected many especially the livelihood of the people of

Tacloban that has affected the economic growth of the city. The limit

per person in every establishment has been challenging in the conduct

of the study.

Recommendations

After analyzing and interpreting the data of the research on the Viability of

Basic Accounting Techniques to the Operation and Survival of SME’s in Downtown

Area Tacloban, City. The researchers have found these recommendations beneficial to

the business entities:

1. Learn and Enhance the knowledge in accounting techniques by attending

government seminars, TESDA, etc. to help expand the business knowledge and

expand business ventures.

2. To the respondents that were under the Sole proprietorship like sari-sari

stores, with no accounting techniques, no monthly, quarterly, or yearly financial

statements made in monitoring and managing their business. The researchers would

like to recommend having a simple inventory listing and income gains/losses to help

them monitor what products are frequently in demand and not.

3. The researchers would also like to address to the Department of Trade

and Industry to have:

44
VIABILITY OF BASIC ACCOUNTING TECHNIQUES

4. 1. A yearly free business seminar by DTI and encourage established

businesses and potential business-minded people to attend such seminars to boost

their knowledge in basic accounting techniques and business management.

REFERENCES

(2006). In L. J. Fitzgerald, Cases, International Journal of Business and Management

(pp. 1-12).

45
VIABILITY OF BASIC ACCOUNTING TECHNIQUES

A.M., F. (2012). The Theory of Equity Theory in Enhancing Organizational

Effectiveness. UK: EuroJournals, Inc.
Adeyemi, A. M. (2011). Small and Medium Scale Enterprises as Survival for
Employment Generation in Nigeria. Journal of Sustainable Development, 4.
Amoako, G. (2013). International Journal of Business and Management. Accounting
Practices of SMEs: A Case Study of Kumasi Metropolis in Ghana.
Bellman, B. a. (2007). Research Methods.
D., E. E. (2012). Challenges of Book Keeping on Small and Medium Scale
Enterprises (SMEs) in Kwaebibirem District. The Case of Apex Global
(Ghana) Limited.
Lisa Sullivan, P. (n.d.). Hypothesis Testing - Chi-Squared Test. Retrieved from
sphweb.bumc.bu.edu:
https://sphweb.bumc.bu.edu/otlt/mph-modules/bs/bs704_hypothesistesting-
chisquare/bs704_hypothesistesting-chisquare_print.html
Lopez, R. J. (2016). Accounting: The Language of Business. In R. L. Jr.,
Fundamentals of Accounting (pp. 75-84). Davao, City: MS LOPEZ
PRINTING & PUBLISHING.

Appendices

SURVEY QUESTIONNAIRE

46
VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Research Title: “THE VIABILITY OF BASIC ACCOUNTING TECHNIQUES

TO THE OPERATION AND SURVIVAL OF SMES IN TACLOBAN CITY.”
General guidelines: Fill out the needed information about your business, items
labeled as “optional” can be filled at your discretion.

Read the following questions carefully. Check the options that best correspond to
your answers. The questions enumerated below are essential to the success of this
study. The researchers are hoping you will answer the questions based on their
applicability to your business.

I. PROFILE AND BACKGROUND OF THE RESPONDENTS

Name of Business (Optional)::
________________________________________________________________
Business Owner (Optional):
__________________________________________________________________
Highest Educational Attainment:
_______________________________________________________________
Does the business have an Accounting Professional/Bookkeeper?
[ ] Yes [ ] No
Is the Accounting Professional Licensed or certified?
[ ] Yes [ ] No
1. Type of the Business
[ ] Service [ ] Merchandising [ ]
Manufacturing
2. Nature of the Business
[ ] Sole Proprietorship [ ] Partnership [ ]
Corporation
3. Years of Operation: ________________________________________

4. Capital of the Business

[ ] less than 500,000
[ ] 1,000,0000 – 50,000,000
[ ] 50,000,000-100,000,000
[ ] More than 100,000,000
II. ACCOUNTING TECHNIQUES APPLIED IN THE BUSINESS

1. Are there any basic accounting techniques that are viable/applied to the
business?
[ ] YES [ ] NO
If not, what are the means used in recording and monitoring business
transactions?

47
VIABILITY OF BASIC ACCOUNTING TECHNIQUES

[ ] Company Established System

[ ] Traditional/ Customize
[ ] Others, pls. specify below:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
__________________
*If yes you may proceed to answer the rest of the questions.

2. How frequent are financial information/reports using the accounting

techniques prepared for in the business?
[ ] Weekly [ ] Monthly [ ] Quarterly [ ] Annually

3. What basic accounting techniques are being applied in the operation of the
business with regards to:
ACCOUNTING PRACTICES:
● Accounting Methods:

[ ] Cash Basis [ ] Accrual Basis [ ] Installment

[ ] Others: (Please specify)
_______________________________________

● Estimation of Bad Debts:

[ ] Aging of Receivables
[ ] Percentage of Accounts Receivable (____% ) *How many percent?
[ ] Percentage of Sales (______%) *How many percent?
[ ] Others: (Please specify)
______________________________________

● Depreciation Method:

[ ] Straight Line [ ] Sum of the Years Digit (SYD) [ ] Double

Declining Method
[ ] 150% Declining Method [ ] Composite [ ] Group
[ ] Others: (Please specify)
_______________________________________

● Net Receivable Estimation

[ ] Allowance for Sales Discounts [ ] Allowance for Sales Returns

[ ] Allowance for Freight Charges [ ] Allowance for Bad debts

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

[ ] Others: (Please specify)

______________________________________

● Business Documents

[ ] Official Receipt [ ] Invoice [ ] Vouchers

[ ] Others: (Please specify)
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________

● Payment Method

[ ] Cash [ ] Check [ ] Credit/Debit Card

[ ] Online Payment: (Please specify)
________________________________
[ ] Others: (Please specify)
_____________________________________________
ACCOUNTING SYSTEM:
[ ] Single Entry [ ] Double Entry
[ ] Others: (Please specify)
____________________________________________
ACCOUNTING PRINCIPLES:
[ ] Going Concern
[ ] Entity Concept
[ ] Historical Cost
[ ] Revenue Recognition
[ ] Expenses Recognition
[ ] Relevance
[ ] Understandability
[ ] Timeliness
[ ] Consistency
[ ] Completeness
[ ] Others: (Please specify)
_____________________________________________

ACCOUNTING CONTROLS

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

[ ] Company deposits cash/ maintains a bank account

[ ] Accountant prepares financial statements
[ ] Records daily expenditures
[ ] Records Daily Sales
[ ] Prepares budget
[ ] Pays payable when due
[ ] Use computers in accounting
[ ] Uses Manual accounting
[ ] Others: (Please specify)
_____________________________________________

III. KNOWLEDGE OF THE ACCOUNTING TECHNIQUES

EMPLOYED AND THEIR EFFECTIVENESS TO SMES
OPERATION AND SURVIVAL
A.

1. How knowledgeable are you with the accounting practices you employed?

[ ] Expert [ ] Knowledgeable [ ] Sufficient [ ] Insufficient

2. How knowledgeable are you with the accounting system you employed?

[ ] Expert [ ] Knowledgeable [ ] Sufficient [ ] Insufficient

3. How knowledgeable are you with the accounting principles you employed?

[ ] Expert [ ] Knowledgeable [ ] Sufficient [ ] Insufficient

4. How knowledgeable are you with the accounting controls you employed?

[ ] Expert [ ] Knowledgeable [ ] Sufficient [ ] Insufficient

B.

1. How do you rate the effectiveness of these accounting techniques in the

operation of your business?
[ ] Highly Effective [ ] Effective { ] Neutral [ ] Not Effective
2. How do you rate the effectiveness of these accounting techniques to the
survival of your business?
[ ] Highly Effective [ ] Effective { ] Neutral [ ] Not Effective
3. Does applying these accounting techniques helpful in business operation?
[ ] Strongly Agree [ ] Agree [ ] Neutral [ ] Disagree

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

4. Does applying these accounting techniques helpful in business Survival?

[ ] Strongly Agree [ ] Agree [ ] Neutral [ ] Disagree

THANK YOU FOR YOUR PARTICIPATION! YOUR RESPONSES ARE

INVALUABLE TO US, TO GOD BE THE GLORY!

October 29, 2021

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 VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Dir. CELERINA T. BATO

Regional Director
Department of Trade and Industry - Regional Office VIII
Leyte Academic Center Pawing Road, Palo, Leyte, 6500

Dear Ma’am:

Greetings!

The undersigned are fourth-year BS Accountancy students from Saint Paul School of
Professional Studies conducting a research study entitled, "THE VIABILITY OF BASIC
ACCOUNTING TECHNIQUES TO THE OPERATION AND SURVIVAL OF SMES
IN TACLOBAN CITY”. The study aims to understand the accounting techniques used by
SMEs and the effectiveness of these techniques in the decision-making process. Most
importantly, the study hopes to provide recommendations to SME owners and the
government to boost the local economy in terms of accounting practices and techniques.
In this regard, the researchers are humbly asking for a copy of the list of SMEs registered in
the year 2020-2021 in Tacloban City. This will help the researchers trace and officially
identify SMEs before conducting the survey and interview.

The researchers hope that this will be given preferential attention. Thank you!

Respectfully,

DOMINIC EARL M. ABLANQUE ROWENA C. FLORES

Researcher Researcher

ROSALYN B. GAYOSO RHEALYN P. LADERA

Researcher Researcher

MA. DOLORES S. OROT

Researcher

Noted by:

CARL ALJON M. LACABA, M.ED.

Assistant Professor, Faculty of Business and
Accountancy Saint Paul School of Professional Studies

CURRICULUM VITAE

Name: Dominic Earl M. Ablanque

E-mail: dominicablanque616@gmail.com

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Date of Birth: September 29, 1999

Education:

2018-Present
Saint Paul School of Professional Studies

2016-2018
Notre Dame of Abuyog

2012-2016
Notre Dame of Abuyog

2006-2012
Bernardo V. Closa Central School

CURRICULUM VITAE

Name: ROWENA CABRERA FLORES

E-mail: whengflores26@gmail.com
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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Date of Birth: April 26, 1990

Education:

2018-Present Saint Paul School of Professional Studies

Campetic, Palo, Leyte

2010 – 2012 Leyte Colleges

Tacloban City

2003 – 2007 Bato Academy, Inc.

Bato, Leyte
With Honors

1997-2003 Lunang Elementary School

Lunang, Hilongos,Leyte
Valedictorian

Work Experience:

March 2016 - February 2018 Senior Media Consultant

Regional Information Directory – Region 8

January 2014 – July 2014 Reservation Officer

Acewin Travel & Tours Corp.

May 2009 – November 2013 Reservation Officer

Angel Rose Travel & Tours

CURRICULUM VITAE

Name: Rosalyn B. Gayoso

E-mail: rosalyngayoso11@gmail.com
Date of Birth: June 15, 2000
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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Education:

2018-Present
Saint Paul School of Professional Studies

2016-2018
Saint Mary's Academy of Guiuan
With High Honor

2012-2016
Taytay Integrated School
Second Honor

2006-2012
Barbo Elementary School
Salutatorian

CURRICULUM VITAE

Name: Rhealyn P. Ladera

E-mail: laderarhealyn@gmail.com
Date of Birth: February 15, 2000

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Education:

2018-Present
Saint Paul School of Professional Studies
Saint Paul’s 2nd Honors
Dean’s List

2016-2018
Notre Dame of Jaro Inc.
With Honors

2012-2016
Notre Dame of Jaro Inc.
With Honors

2006-2012
Jaro I Central School
2nd Honorable Mention

CURRICULUM VITAE

Name: Ma. Dolores S. Orot

E-mail: orotmdolores29@gmail.com

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VIABILITY OF BASIC ACCOUNTING TECHNIQUES

Date of Birth: June 29, 1999

Education:

2018-Present
Saint Paul School of Professional Studies

2016-2018
Daram National High School
With Highest Honors

2012-2016
Daram National High School
Second Honors

2006-2012
Daram I Central Elementary School
Salutatorian

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