CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The owner of a business naturally wishes to run his business as efficiently as possible. One of the purposes of keeping accounts is to enable one to do this. i. Its account should avail him the necessary cost data for effective operation. ii. The exact revenue of the business With such information, the owner of the business can make comparison the from year to year. Comparing the profit this year with the preceding years and investigate any variances. This is by making comparison of the expenses incurred. By studying his account in this manner, the business manager can now formulate a business policy. He may, for instance take a decision on whether to adjust prices of his product, to embark on advertisement/awareness, to introduce new product, drop existing ones etc.
To change the method of production or to change the organizational structure. To the ordinary man in the street, account mean story, explanation, or report of money received and spent. In the past, the actual recordmaking is called “Book Keeping”. However, accounting to day extends beyond book-keeping. Accounting is a discipline concerned with the recording, analysis, and forecasting of income and wealth of business and other terms, of the flow of economic values between or within economic entitles. According to (Wood’s 1982), “Accounting is said to be the language of business”. At a given time, accounting made it possible for a business man to discover: i. The value of his input and output ii. The available cash/bank balance iii. His debtors and creditors iv. Whether profit or loss v. The financial position of the business According to “(White head 1979)” Accounting is the art of controlling a business by keeping accurate book keeping records, preparing from those records certain statistics called “Accounting ratios, using those ratios to dictate financial difficulties before they become serious, so that counter measure may be taken”. However, it is necessary to review the definition of the objective of accounting in line with the present role expected of accounting discipline.
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