Financial Accounting Practices Among Small Enterprises : Issues and Challenges

This paper explores the financial accounting practices adopted by small-scale enterprises operating in Dhanbad and Bokaro districts of the State of Jharkhand by analyzing a sample of 52 units consisting of retail shops, manufacturing firms and suppliers of various services through administration of a structured questionnaire. The study identifies that most of the investigated enterprises do not adhere to the financial accounting rules laid down by the appropriate government authorities. Thus, a further attempt is made to analyze the different factors influencing the non-adherence to properly laid down accounting rules by the small-scale units. The findings reveal that most of these small-scale units lack knowledge in bookkeeping, cost computation and compilation, and time management in maintaining financial records, which in turn affects the adoption of proper financial accounting guidelines by these business units