EVALUATING THE EFFICIENCY OF ACCOUNTING RECORDING FOR DOUBTFUL AND BAD DEBTS : CASE STUDY: UNITY COOPERATIVE SOCIETY(UNICS) CAMEROON. COMPARED TO NORDEA BANK FINLAND
Jenarius, Taku (2013)
Jenarius, Taku
Centria ammattikorkeakoulu (Keski-Pohjanmaan ammattikorkeakoulu)
2013
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-201302222533
https://urn.fi/URN:NBN:fi:amk-201302222533
Tiivistelmä
The purpose of this research is to make an evaluation on the efficiency of accounting for doubtful and bad debts for Unity Co-operative Society Plc. (UNICS), a micro financial institution in Cameroon.
A purposive sampling technique was used to select two banks for the study. A face-to-face interview was conducted with the manager of Nordea Bank. The manager of UNICS made available the financial statements for 2006 to 2009, he also answered some questions over the telephone.
Research findings showed that UNICS had failed in the period 2006 to 2009 to record properly the bad debt expenses. Also, the bad debt expense policy did not appropriately match revenue to expenses incurred, as such, revenue was not properly recognized in accordance to Generally Accepted Account Principle. (GAAP). In 2007, the Annual Report reflected liquidity assertion that was contradictory to the cash flow difficulty shown in the Cash Flow Statement. In conclusion, UNICS needs to take a more conservative approach in matching and recognizing revenue and expenses incurred, and practice proper accounting reporting in accordance with the GAAP. Also, UNICS need to minimize the bad debt expense and solve the cash flow problem by selling most of the account receivables without recourse
Nordea Bank uses ratios calculation to enhance the quality of financial statements, hence, has been able to solve debt related problems. These ratios calculated provide information about how Nordea assesses different aspects of her performance and how effectively or ineffectively it is performing.
A purposive sampling technique was used to select two banks for the study. A face-to-face interview was conducted with the manager of Nordea Bank. The manager of UNICS made available the financial statements for 2006 to 2009, he also answered some questions over the telephone.
Research findings showed that UNICS had failed in the period 2006 to 2009 to record properly the bad debt expenses. Also, the bad debt expense policy did not appropriately match revenue to expenses incurred, as such, revenue was not properly recognized in accordance to Generally Accepted Account Principle. (GAAP). In 2007, the Annual Report reflected liquidity assertion that was contradictory to the cash flow difficulty shown in the Cash Flow Statement. In conclusion, UNICS needs to take a more conservative approach in matching and recognizing revenue and expenses incurred, and practice proper accounting reporting in accordance with the GAAP. Also, UNICS need to minimize the bad debt expense and solve the cash flow problem by selling most of the account receivables without recourse
Nordea Bank uses ratios calculation to enhance the quality of financial statements, hence, has been able to solve debt related problems. These ratios calculated provide information about how Nordea assesses different aspects of her performance and how effectively or ineffectively it is performing.