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ACCOUNTING PRACTICES AND PROFITABILITY IN SMALL AND MEDIUM ENTERPRISES:

CASE STUDY: TUSKYS SUPERMARKET.

BY LUMALA ABDUL 07/U/9924/EXT

ABSTRACT The study was about accounting practices and profitability with particular reference to Tuskys supermarket (SMEs). The study objectives therefore were to find the accounting practices used by SMEs in Uganda, the profitability measures of Tuskys Supermarket and the relationship between accounting practices and profitability in SMEs as the main objective.

The researcher used both descriptive and explanatory methods to analyze both quantitative and qualitative data. The sources of data included both primary and secondary. The researcher obtained primary data through observation and communication with the respondents in several ways with help of a questionnaire in which data was filled after interviewing 30 respondents. Secondary data was obtained from new trade journals, internet, text books and publications.

The findings on accounting practices showed that majority of SMEs use accounting practices, money measurement concept is the most used concept, accounting practices are simple and easy to understand, accounting practices help in the smooth running of the business, accounting practices are day to day implementation of accounting practices such as daily recording of transactions and the operation of the business is totally dependent on the proper accounting practice.

The findings on profitability measures showed that SMEs register losses, methods used to determine profitability are not know by every staff member but they are known by a special group of staff which is entitled to know them, management influences profits and losses of the business, the rise in expenses, sales and revenue affect profitability and methods used to determine profitability are not know by every staff member but they are known by a special group of staff which is entitled to know them The findings on the relationship between accounting practices and profitability showed that there is a positive relationship between accounting practices and profitability and they work complimentary. From the findings, it can be concluded that SMEs level of profitability is greatly influenced by the accounting practices. The majority agreed that the accounting practices and profit implications are being experienced. Accounting practices was adequate and the study confirmed