Accounting Practices and

Challenges Faced by Selected Online

Micro Businesses in Davao City
HONEY MAE VERGARA BARCELO
ROY JONES AMBAY EMANEL
SANDY MACATANGAY KALAW
KARLO DAVE GAY PALER
ADAROSE GALUPE ROMARES
CHAPTER 1
Introduction
 Background of the Study
In theis
There
With Philippines,
global
thea arena,
growing
current the
a study
online
recognition
trends and made
business
of
progress by
the
in
In the
Accounting local arena,
has come people
to are
occupy
Uddin
industry
important
the (2019)
is gaining
roles
accounting examined
Micro,
for ground
theentities,
Small
micro accounting
as digital
and Medium
this
anmostly
ever
marketplaces
practices engaging
more
of micro
end 2018 in
online the
significant
with online-
position
businesses
record highs
Scale study
Enterprises
aims to (MSMEs) playof
assess the level inand
theto
based
theirin the
reflect
accountingtransaction
functioning
challenges
the growing
in in
Scotland
practices doing
of
number
and modern
and
theof their
Filipinos
found
challengesout
economic growth and sustainable
doing
that most
faced their
by ofbusinesses.
shopping
theonline
industrial
micro micro
online
businesses
societies.and in
business
development of every nation
accessing
used
Davao
their
singlenecessities
entry bookkeeping
digitally
City. (Zialcita,2019).
and cash basis
(Palich & Longernecker, 2018)
 Statement of the Problem
3.1.What
2. Whatisisthethelevel
demographic
of the profile
accounting
challenges of
practices
in the
This
online
used 4. study
accounting
by Is there
micro
online a significant
aims tofaced
business
practices
micro byrelationship
determine
in terms
business of:the
online
with level
reference
micro
toa.of between
accounting
Nature
business
the the factors:
inofterms
following accounting
practices practices
of their: used
Business and
by micro
d.b.Sales
g. challenges
online
Years
Recordingof operation
Promotion faced in
business byDavao
micro online
City.
e.c.Budgeting
h. Average businesses
Competitors in Davao City?
Monthly Income
f. Government
i. Reporting Agencies
Objectives of the Study
1.4.
ToTo
2.
3. present
To assessthe
determine
discover demographic
thethe
ifchallenges
there profile
by of
level isofaaccounting
faced
significant
selected
practices
micro micro
relationship
online
of microonline
business
between
onlinebusinesses
inaccounting
businessesin in
dealing its
Davao
practices City
competitors,
terms of and in terms
recording,
the
sales of its type
challenges
promotion
budgeting of by
faced
and
and
business,government
yearsreporting.
online of operation
micro agencies
business.and legal
ownership.
 Significance of the Study
• Bureau of Internal Revenue
• Department of Trade and Industry
• Online Business Owners
• Certified Public Accountants
• Future Online Businesses
• The Researchers
• Future Researcher
Scope and Limitations of
the Study
However,
Also, this due towas
study various constraints,
designed to know the
Generally, the study sought to
lack of exact
whether andistimely
there a record of the
significant
determine the accounting practices
total registered
relationship micro the
between online business in
accounting
used by selected micro online
Davao
practices usedCity
and played
the a significant
success of micro
businesses in Davao City.
limitation in this
online research paper.
business.
 Definition of Terms
• Accounting • Government Agencies
• Accounting Practice • Micro Enterprise
• Average Monthly • Nature of Business
Income • Recording
• Budgeting • Reporting
• Competitors • Sales Promotion
• Demographic Profile• Years of Operation
• Digital Marketplace
CHAPTER 2
Review of Related
Literatures
 Accounting Practices:
Shiegel and Shim (2020) defines accounting
practices as normal practical applications of
accounting and or auditing practices that occur
within a business.
Ramin (2019), accounting practices are vital to the
MSMEs in making a better financial and
management decision.
 Micro Business:
In the Philippines, micro business is defined by RA. 9178 Act
of 2002 as:
“any business enterprise engaged in production, processing, or
manufacturing of products, including agro-processing, as well
as trading and services, with total assets of not more than P3
million. Such assets shall include those arising from loans but
not the land on which the plant and equipment are located.”
 Online Micro Business:
Turban (2010), as cited by Rahayu and Day (2015), defined
online business as the:
“Process of buying, selling, transferring, or exchanging products,
services, and/or information via computer networks with the aid of
the internet”.
Based on the study conducted by Rahayu et al. (2015), it
was found out that a great number of MSMEs have decided
to enter the world of online business.
 Challenges Faced by Micro
Online Business
According to Anwar, Yuangga and Sholeh (2019),
most of the micro business’s owners are having
difficulties in marketing and financing.
The study conducted by Quingco and Leonoras (2019)
concluded that technology is the main indicator that
micro business owners are highly challenged.
 Level of
Accounting
Practices
 Recording
Bwana and Mwakujonga (2013) stated that recording
becomes an accounting practice to develop or create
financial statements that are relevant to business
undertaking.
Amoako (2013) in his case study on the accounting
practices of MSMEs Kumasi Metropolis in Ghana
found that MSMEs do not maintain proper books of
 Budgeting
Warue and Wanjira (2013) avowed that budgets are
the foundation and manifestation of a business plan
and action.
Maduekwe and Kamala, (2016) stated that failure
to budget has been identified as one of the main
causes of MSMEs failure.
 Reporting
In accounting terms, reporting is the disclosure of
It is revealed
financial resultsin and
the findings
related that in Southto
information
Africa, few
management andofexternal
the MSMEs were
stakeholders aboutfully
how
a utilizing
company is the accounting
performing information
over a specific period of
time. It mayinbereporting
systems subject to the
the requirements of the
financial results
applicable
and that accounting
contributedframework,
to their suchfailureas
Generally Accepted
(Peacock, 2018). Accounting Principles or IFRS
 Challenges
faced by Online
Micro Business
 Competitors
The presence of one or more competitors can reduce the
prices of goods and services as the companies attempt to
gain a larger market share (Bragg, 2020).
A study conducted by Blees, Mosselman, and Zoetermeer
(2018) concluded that competitors are either anticipated
to cause a drop in market price or at the exceptionally
slightest have no impact in SME’s.
 Sales Promotion
Išoraitė, M. (2020) stated that sales promotion provides
information on product availability, features, benefits, and price.

Išoraitė (2020) found out that in order to encourage shoppers to

visit online business more often, sales promotions should be
more frequent.
 Government Agencies
Government agencies regulate the operations of the
business (Neeg, 2018).

Regulation is mostly seen as a costly deterrent for firms

that aim to formalize or scale up productive activities (De
Soto, 2018).
 Relationship between Accounting
Practices and Challenges faced by
Online Micro Business
According to
Ahammed, Parwati, and
Becluocif, Nurdin, Indriasari(2019)
Tarbetsssss and
Zahra (2016),
examined most of the
the accounting micro and
practices businesses lackof
challenges
definite
online accounting practices
microbusiness. The study making it hard
showed that theretois
accessemergence
rapid additional of
capitalization from any
microbusinesses source
in Scotland
especially
which those
accounts that than
for more are94%
initiated
that goesbyonline.
the
government.
 Theory Base
The study was anchored in the Accounting Theory by
In addition, the Financial Management Theory
William Patón (1922). The theory uses speculations,
is used in this study. It states that the way a
methodologies and frameworks in the study of
manager makes decisions results in either the
financial reporting as well as how financial reporting
success or failure of any organization (Brigham
principles are applied in the accounting industry.
and Ehrhardt, 2013).
 Conceptual Framework
INDEPENDENT VARIABLE DEPENDENT VARIABLE

Challenges Faced by
Accounting Practices Online Micro Business
 Recording • Competitors
 Budgeting • Sales Promotion
 Reporting • Government Agencies

Demographic Profile
 Nature of Business
 Years of Operation
 Average Monthly Income
 Research Hypothesis

There is a significant relationship

between levels of accounting practices
and challenges faced by selected online
micro businesses in Davao City.
CHAPTER 3
Methodology
 Methods Used

This study used a descriptive-correlational

method of research. A descriptive research is a
scientific method which involves observing and
describing the behavior of a subject without
influencing it in any way (Shuttleworth, 2018).
 Sources of Data
This research study will utilize primary data. The
data and information will be obtained and
accumulated through the use of online survey
questionnaires and will be administered digitally to
the selected respondents from different online micro
businesses in Davao City through the use of google
forms.
Data Gathering Instrument
The researchers will use an adapted survey questionnaire
instrument which originated from the study of Anoos,
Ferrater-Gimena, Etcuban, Dinauanao, Macugay and
Velita (2020) to gather data needed in this study.
TABLE 2. LIKERT SCALE FOR THE LEVEL OF ACCOUNTING
PRACTICES
Rate Mean Description Level Interpretation
Interval
5 4.50-5.00 Highly practiced Online micro businesses highly
practiced accounting practices
4 3.50-4.49 Moderately practiced Online micro businesses moderately
practiced accounting practices
3 2.50-3.49 Fairly practiced Online micro businesses fairly
practiced accounting practices
2 1.50-2.49 Less practiced Online micro businesses less
practiced accounting practices
1 1.00-1.49 Not practiced Online micro businesses does not
practiced accounting practices
 Table 3. Likert Scale for the Challenges Faced by Micro Online
Business
Rate Mean Description Interpretation
Interval Level
5 4.50-5 Highly Online micro businesses faced highly
Challenging challenging problems
4 3.50-4.49 Moderately Online micro businesses faced highly
Challenging challenging problems
3 2.50-3.49 Fairly Online micro businesses faced highly
Challenging challenging problems
2 1.50-2.49 Less Challenging Online micro businesses faced highly
challenging problems
1 1.00-1.49 Not Challenging Online micro businesses faced highly
challenging problems
 Research Procedures
•• Research
Gathering proposal
related and commencement
issues, of data
and the researcher
gathering
presented the study for the appraisal of the
• Letter
adviser.of requests
• The survey questionnaire
researchers worked onwill
thebesuggestions
handed to and
the
respondents
corrections invia
theGoogle Survey
research paper.Form
• The researchers
data will decide
be interpreted,
what designanalyzed
to be used.and
processed
 Sampling Technique
This study will use a purposive sampling method.
Purposive sampling method is a non-probability sampling
technique. A non-probability sampling technique is a
technique in which the number of members being selected
for a sample need not to be calculated and can be relied
upon the judgement of the researchers (Glen, 2015).
 Statistical Treatment
The following statistical tools will be utilized:
• Frequency count
• Mean scores
• Pearson product-moment correlation