Management Accounting And Practices Of Small And Medium Enterprises

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This chapter begins by looking at the literature that will give considerable information about Management Accounting and the practices of Small and medium Enterprises, bringing out the interdependence and interrelation of one to the other.
2.2 Overview of Management Accounting
Management accounting was first known as cost accounting. This origin was reflected in the earlier title for practitioners of cost or works accountants (Wilson and Chua, 1988). Accounting historians have long endorsed the view that cost accounting is a product of the industrial revolution (Johnson, 1981). For example (Wilson and Chua, 1993) claimed that cost accounting was practiced by the mechanized, multi process, cotton textile factories that appeared in England and United States around 1800. This point of view was consistent with Garner (1947) who pointed out that cost accounting had emerged only after eighteenth century as a result of the rise of the factory system in the industrial revolution. The traditional view contends that cost accounting arose due to the increased use of fixed capital prompted accountants during the industrial revolution to graft cost accounting onto the double-entry system (Johnson, 1981). Garner (1947) argued that the practices and theories of cost accounting origins can be traced to the fourteenth century. (Garner, 1947) explained that the English, Flemish and German commerce have encountered significant growth during this period. and various industrial enterprises were…

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