¹Adnan A.A. Qubbaja, ²Ishaq A.H. Talahmeh

¹,²Department of Finance, Palestine Ahlia University-Bethlehem- Palestine

This paper examined the accounting practices of SMEs drawing on a survey of 100 SMEs in Palestine. The results revealed that majority of SMEs failed to keep proper accounting records pertaining to their businesses. Consequently, it was difficult for the owner-managers to determine the profit earned or loss suffered in the business during a particular accounting .The major reasons for the entities failure to maintain proper accounting records and prepare a complete set of financial statements included inability to prepare financial reports as a result of poor records keeping, Lack of skills, inability to prepare financial Reports, Distrustful attitude of owner /manager, Cost of hiring qualified employees, finally fear to disclose all information to government.

It is recommended that training programs must be organized to sensitize owners/managers on the need to maintain proper books of accounts. The government should also come out with the necessary legal instruments to make the preparation of proper books of accounts mandatory in order to improve SMEs practice of accounting in Palestine.

Accounting practices of SMEs, Palestine, SMEs practice of accounting

1) Ademola, G. O., Samuel O. J.& Ifedolapo O. 2012 The Roles of Record Keeping In the Survival and Growth of Small Scale Enterprises in Ijumu Local Government Area of Kogi State”, Global Journal of Management and Business Research Volume 12 ( 13) Version 1.0 .

2) Dawuda, A & Azeko, I. 2015, An Assessment of Financial Records Keeping Behaviour of Small Scale Businesses in Ghana: A Case Study of Bolgatanga Municipality, International Journal of Finance and Accounting 4(3), 187-194

3) Deresee Lakew, Zerihun Biribirsa , 2017 Does Access to Formal Financial Sources Leads to Growth of Micro and Small Enterprises? Evidence from West Oromia Region, Ethiopia Journal of Developing Country Studies,volume7, pp .61-69

4) Ezeagba, C. 2017, Financial Reporting in Small and Medium Enterprises (SMEs) in Nigeria. Challenges and Options, International Journal of Academic Research in Accounting, Finance and Management Sciences 7(1), 25-34.

5) Fitzgerald, M.A., Haynes, G.W., Schrank, H.L., & Danes, S.M. 2010, Socially Responsible Processes of Small Family Business Owners: Exploratory Evidence from the National Family Business Survey”, Journal of Small Business Management 48 (4), 524-551.

6) Garedew Ganecho Gebremedihin , 2019 , Challenges to Implement Proper Accounting Record in Micro and Small Scale Enterprises (MSE) ,In Case of Wolatia Sodo Town, Ethiopia International Journal of Advanced Research (IJAR), 7(3), 270- 278 .

7) Girmachew Kahsay and Girma Zeleke , 2019 Factors Affecting Use of Accounting Records on Small & Micro Enterprises (the Case of Debre Birhan City, Ethiopia), Journal of Investment and Management Volume ( 8) 1,1-7.

8) Justice Stephen Tetteh Zotorvie , 2017 A study of Financial Accounting Practices of Small and Medium Scale Enterprises (SMEs) in Ho Municipality, Ghana, International Journal of Academic Research in Business and Social Sciences, 7(7), 29- 39.

9) Madurapperuma, M. W., Thilakerathne, P. M. C., & Manawadu, I. N., 2016 Accounting record keeping practices in Small and Medium sized Enterprise’s (SME’s) in Sri Lanka, Journal of Finance and Accounting , 4( 4) , 188-193.

10) Maseko, N. and Manyani, O. , 2011 Accounting practices of Small and Medium Enterprises in Zimbabwe. An investigative study of record keeping for performance measurement. (A case study of Bindura), Journal of Accounting and Taxation, 3 (8) , 171-181.

11) Mira, G. K., & Ogollah, K. 2013 Challenges facing accessibility of credit facilities among young women owned enterprises in Nairobi Central Business District- Kenya, International Journal of Social Sciences and Entrepreneurship, 1 (7), 3777-396.

12) Musah, Alhassan. 2017 Benefits And Challenges Of Bookkeeping And Accounting Practices Of Smes And Its Effect On Growth And Performance In Ghana, Journal of Accounting – Business & Management. 24( 2) , 16 - 36.

13) Onaolapo, A., & Adegbite, I. 2014 The Analysis of the Impact of Accounting Records Keeping on the Performance of Small Scale Enterprises., International Journal of Academic Research in Business and Social Sciences. 4 (1), 1-17

14) Palestine Monetary Authority (2017) , Annual Report .

15) Prasad, S., C. Green & V. Murinde. 2001 Corporate financial structures in developing economies: Evidence from a comparative analysis of Thai and Malay corporations, Working Paper Series, Paper No 35. Finance and Development Research Program, University of Manchester.

16) Schwenk, C. R., & Schrader, C. 1993 Effects of Formal Strategic Planning on Financial Performance in Small Firms: A meatanalysis. Entrepreneurship, Theory & Practice, 17(3), 14-22.

17) Williams and Susan Haka and Mark Bettner and Joseph Carcello, 2018. Financial Accounting 17th Edition, McGraw-Hill Education

VOLUME 03 ISSUE 12 DECEMBER 2020