LIST OF ABREVIATIONS
ACCA: Association of Chartered and Certified
Accountants
AICPA: American Institute of Certified
Accountants
APB: Accounting Principles Board
DAF: Director of Administration and Finance
FIFO: First In First Out
LIFO: Last In First Out
GRN: Goods Received Note
GAAP: General Accepted Accounting Principles
SMEs: Small and Medium Enterprises SFB:
School of Finance and Banking Dr: Debit
Cr: Credit
IAS: International Accounting Standards
IFRS: International Financial Reporting
Standards
KIST: Kigali Institute of Science and
Technology
NGOs: Non Government Organizations US:
United States of America
PA: Professional accountants
ERP: External Reporting Program SMB:
Small and Medium Businesses
LIST OF TABLES
TABLE1. EXISTENCE OF THE ACCOUNTING SYSTEM 42
TABLE2. MAIN CONSIDERATIONS WHILE CHOOSING ACCOUNTING
SOFTWARE 43
TABLE3. BASIC POINT WHILE DESIGNING ACCOUNTING SYSTEM
44
TABLE4. METHOD USED TO RECORD THE FINANCIAL TRANSACTIONS
44
TABLE5. THE EDUCATION LEVEL OF THE INYANGE'S CHIEF
ACCOUNTANT 45
TABLE6. THE DESIGNER OF ACCOUNTING SYSTEM IN INYANGE
INDUSTRIES 45
TABLE7. BASIS OF ACCOUNTING USED IN INYANGE INDUSTRIES
46
TABLE8. THE USE OF SOURCE DOCUMENTS 47
TABLE9. COMPLIANCE WITH THE GENERAL ACCEPTED ACCOUNTING
PRINCIPLES 48
TABLE10. LEVEL OF COMPLIANCE WITH GENERAL ACCEPTED
ACCOUNTING PRINCIPLES
49
TABLE11. EFFECTIVENESS OF INYANGE'S ACCOUNTING SYSTEM
49
TABLE12. TRAINING OF ACCOUNTING STAFF 50
TABLE13. TRAINING SUBJECTS FOR ACCOUNTING STAFF
50
TABLE14. THE BEST DOING OF THE COMPANY TO IMPROVE ITS
ACCOUNTING SYSTEM 51
TABLE15. THE PREPARATION OF BUDGET FOR WELL DESIGNING OF
ACCOUNTING SYSTEM 52
TABLE16. HAVING AN INTERNAL CONTROL SYSTEM 52
TABLE17. PREPARATION OF FINANCIAL STATEMENTS
53
TABLE18. PREPARATION OF BOOKS OF ACCOUNTS 53
TABLE19. ACCOUNTING STANDARD FOLLOWED WHEN PREPARING
FINANCIAL STATEMENTS AND BOOKS OF ACCOUNTS 54
TABLE OF CONTENTS
DECLARATION I
CERTIFICATE II
DEDICATION III
AKNOWLEDGEMENT IV
LIST OF ABREVIATIONS V
LIST OF TABLES AND FIGURES. VI
TABLE OF CONTENTS VII
ABSTRACT X
CHAPTER ONE: GENERAL INTRODUCTION 1
1.0. BACKGROUND OF THE STUDY 1
1.1. STATEMENT OF THE PROBLEM 2
1.2. OBJECTIVES OF THE STUDY 3
1.2.1. GENERAL OBJECTIVES 3
1.2.2. SPECIFIC OBJECTIVES 3
1.3. SIGNIFICANCE OF THE STUDY 4
1.4. SCOPE OF THE STUDY 4
1.5. COMPANY PROFILE 5
1.5.1. Historical background 5
1.5.2. Location of the company 5
1.5.3. Mission 6
1.5.4. Objectives 6
1.5.5. Shareholders and capital 6
1.5.6. Management 6
CHAPTER TWO: LITERATURE REVIEW 7
2.1. GENERAL INTRODUCTION 7
2.1.1. Historical background of accounting
7
2.1.2. Definition of accounting 8
2.1.3. Braches (Fields or Careers) of accounting
9
2.2. BUSINESSES' OBJECTIVES 10
2.4. TYPES OF BUSINESS TRANSACTIONS AND BASES OF
ACCOUNTING 12
2.5. BASES OF ACCOUNTING 13
2.6. USERS OF ACCOUNTING INFORMATION
13
2.7. ACCOUNTING PRINCIPLES 15
2.8. ACCOUNTING SYSTEM 17
2.8.1. Objectives of accounting system
17
2.8.2. Characteristics of an effective accounting
system 17
2.9. ACCOUNTING CYCLE 18
2.10. IMPORTANCE OF GENERAL ACCEPTED ACCOUNTING
PRINCIPLES 19
2.11. THE SYSTEM OF BOOKKEEPING 20
2.11.1. Double entry bookkeeping 20
2.11.2. Single entry system 21
2.12. ACCOUNTING BOOKS 22
2.12.1. Journals or books of prime entry
22
2.12.2. Subsidiary journals or daybooks
23
2.12.3. The ledger 24
2.13. SOURCE DOCUMENTS 25
2.14. OTHER SOURCE DOCUMENT 26
2.15. USE OF SOURCE DOCUMENTS 27
2.16. DEVELOPING AN ACCOUNTING SYSTEM
28
2.17. FINANCIAL STATEMENTS 28
2.17.1. Balance sheet (statement of financial
position) 29
2.17.2. Statement of cash flows (statement of
resources and application) 30
2.17.3. Trading, Profit and Loss account (income
statement) 30
2.18. OBJECTIVES OF FINANCIAL STATEMENTS
31
2.19. THE QUALITIES OF ACCOUNTING INFORMATION
31
2.20. THE NEEDS OF AN ACCOUNTING SYSTEM
32
2.21. THE ACCOUNTING OBJECTIVES TO BE CONSIDERED
WHILE DESIGNING 33
AN ACCOUNTING SYSTEM 33
2.22. THE LIMITATIONS OF ACCOUNTING
33
2.23. DEFINITION OF SMES 35
2.24. ACCOUNTING SYSTEM FOR SMES 37
CHAPTER THREE: RESEARCH METHODOLOGY
39
3.1. INTRODUCTION 39
3.2. POPULATION 39
3.3. SAMPLING SIZE: 39
3.5. DATA PROCESSING 40
3.6. LIMITATIONS FOR THE STUDY 41
CHAPTER FOUR: DATA ANALYSIS AND INTERPRETATION
42
INTRODUCTION 42
CHAPTER FIVE: SUMMARY OF FINDINGS, RECOMMENDATIONS
57
AND CONLUSION 57
5.1. SUMMARY OF FINDINGS 57
5.2. CONCLUSION 59
5.3. RECOMMENDATIONS 60
5.4. SUGGESTIONS FOR FUTURE RESEARCHER
62
BIBLIOGRAPHY 63
APPENDICES 64
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