Internal Control of Accounts Receivable Management and Return On Assets of Multi Purpose Based Cooperatives in Las Pinas City. October 2018

University of Perpetual Help System Dalta
Las Piñas Campus
INTERNAL CONTROL OF ACCOUNTS RECEIVABLE

MANAGEMENTAND RETURN ON ASSETS OF MULTI PURPOSE
BASED COOPERATIVES IN LAS PIÑAS CITY
An Accounting Technology Research

Presented to the Faculty of the
College of Business Administration and Accountancy
University of Perpetual Help System DALTA, Las Piñas City
In Partial Fulfillment of the

Requirements for the Degree
Bachelor of Science in Accounting Technology
Bacones, Ainee Natashia A.

De Vera, Ma. Trixcy S.
Dejayco, Kim Zsofia L.
Novila, Shaniah S.
October 2018

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Las Piñas Campus
APPROVAL SHEET
This undergraduate thesis entitled “INTERNAL CONTROL OF

ACCOUNTS RECEIVABLE MANAGEMENTAND RETURN ON
ASSETSOF MULTI PURPOSE BASED COOPERATIVES IN LAS
PIÑAS CITY” prepared and submitted by Bacones, Ainee Natashia
A., De Vera, Ma. Trixcy S., Dejayco, Kim Zsofia L., and Novila,
Shaniah S. In partial fulfillment of the requirements for the degree of
BACHELOR OF SCINCE IN ACCOUNTING TECHNOLOGY has been
examined and recommended for acceptance and approval for Final
Oral Examination.
Antonio V. Maico Jr., CPA Amir T. Auditor, CPA, MSA

Thesis Adviser Thesis Instructor
ORAL EXAMINATION COMMITTEE

Approved by the Committee on Oral Examination with a grade of ______
Ryan Jay J. Carasco, CPA Amir T. Auditor, CPA, MSA

Panel Member Panel Member
Annelen B. Marcos, CPA, MBA

Chair Panel
Accepted and approved in partial fulfillment of the requirements for

the degree of Bachelor of Science in Accounting Technology.
Leticia C. Gamad, MBA, MAED, CFMP, DBA

OIC Dean, College of Business Administration and
Accountancy

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ACKNOWLEDGEMENT
TheResearchers wishes to express their deepest
appreciation to the following people who contributed to the
completion of this humble work. Indeed, we would not have
made it this far without their support; they are:
To Mr. Antonio V. Maico, CPA, our adviser, who
motivated us to further expand our knowledge and providing us
guidance and understanding throughout the process and
assisted us with patience.
To Mr. Amir T. Auditor, CPA, MSA,our Accounting
Technology Research professor, who gave us the golden
opportunity to do this research which helped us came to know
about so many new things in the field of accounting and
business.
To our respondents, the employees of the Selected
Multi-Purpose Cooperatives in Las Piñas, for their willingness

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to participate in the study, and steadiness in answering the
survey questionnaire amidst their busy schedule.
To our families and friends, for their encouragements,
unending patience and support to pursue this research.
And most of all to the Almighty GOD, for always guiding
our path and giving us these persons to guide and support us.

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ABSTRACT
Name of Institution : University of Perpetual Help

System DALTA
Address : Alabang-Zapote Road, Las Piñas

City
Title : Internal Control of Accounts

Receivable Management and
Return on Assets of Multi-
Purpose Based Cooperatives in
Las Piñas City
Authors : Bacones, Ainee Natashia A.

Novila, Shaniah S.
Degree : Bachelor of Science in Accounting

Technology
Major : Accounting Technology
Date Completed : October 2018

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Las Piñas Campus
ABSTRACT
This study assessed the internal control of accounts
receivable management and return on assets of multipurpose
based cooperatives in Las Piñas City. It answered the questions
about the demographics, the extent of accounts receivable
management practiced, and the return on asset levels of the
multipurpose cooperatives. It utilized the descriptive-qualitative
research methods to answer the research questionnaire. The
respondents of the study are nine multipurpose cooperatives in
Las Piñas City. It will also review the practices done by the said
cooperatives to have an effective accounts receivable
management and ascertain if the return on assets ratio is a
relevant measure of business performance. Furthermore, this
study contributes to the business industry as it will give apparent
ideas and suggestions that local cooperatives may consider in
their efforts to be able to function and operate successfully their
businesses.

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Las Piñas Campus
The researchers used a receivables questionnaire from a
previous study which was re-modeled and re-written for the
study’s specific qualifications. Quota-Sampling technique was
used in selecting the respondents for the study. Quota sampling
method is a non-probability sampling in which the researchers
will gather a representative data from a group. To achieve
research objective, the researchers acquired information from
85% of the total number of multi-purpose cooperatives in Las
Piñas City. Nine cooperatives among 11 registered multi-
purpose cooperatives in Las Piñas City as of 2017, would be
appropriate. They were chosen due to the proximity and time of
the researchers. For the statistical treatment of the data
frequency count, percentage, and mean utilizing the Statistical
Package for Social Sciences (SPSS) were employed.
Account receivables represent large investment in asset
and involve significant volume of transactions and decisions that

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Las Piñas Campus
is why this are one of the most important part of working capital.
However, there are considerable differences in the level of
receivables in firms around the world. Internal control of
accounts receivable’s main purpose in the business is to ensure
that all receipts are recorded appropriately and that customers
pay without delay and in accordance with agreed terms of
business. Policy and procedures and segregation of duties are
very important procedures for internal control as it helps to
reduce the risk of assets loss and to secure that everything is
perfect and precise.
Multi-Purpose Cooperatives has a huge number of tasks
to remove and its control for the different purpose for which it
has been set up. The works of multi-purpose cooperatives
includes arranging credit, improved seeds, agricultural
implements, fertilizers, sanitation, health for its members.
Cooperatives offer high standard of goods and services, invest
in regional communities, also their profit only stays within the

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community, the networks they’re created has strengthen the
community, workers in the cooperative delegate jobs for the
community members and lastly purchasing cooperatives helps
local businesses.
The researchers discuss the extent of accounts
receivable management practice in terms of credit of
application, timely invoicing, early pay discounts, debt collection
and return on assets ratio. In order to carry out receipt, they
should have credit application that gather all needed
information. New clients’ needs to yield a list of credit references
and contact them to confirm that the latent client is responsible.
Advanced payment from customers is a valuable practice in
timely invoicing. The significance of forwarding customer’s
invoice in a timely manner is essential to perpetuate a
successful business. Late payments can have an intense impact
in the small business’s cash flow. The best practice to persuade
members to pay early is sales discount. It can cultivate the cash

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flow of an enterprise. It is very important to always notify the
customers and clients that the discount is recognize only on the
agreed date. Having a plan of action when it comes to intending
to collect a debt from customers who are neglectful is important.
To settle the debt collection, it is better to communicate
personally to the customer. Lastly, the Return on Assets (ROA)
ratio shows the relationship between earnings and asset base of
the company.
The findings revealed that majority of the respondents are
engaged for 11 to 15 years in the industry. Also, majority of
them cater for credit cooperative and more than half of the total
population have 1 to 9 employees. Moreover, most of the
cooperatives conduct internal control audit on its accounts
receivable management system ‘almost always’. Lastly, majority
of the cooperatives’ organizational profitability is at average
level. The findings also noted that The respondents assessed
that the internal control of accounts receivable management

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have a high level rating. There is a strict management
implementation of internal control of accounts receivable to
encourage its members to pay early for discounts, to maintain
detailed accounts receivable record in credit application, to have
adequate procedures when it comes to debt collections and to
have timely invoicing and that the respondents assessed that
they are highly profitable when it comes to their assets.
The researchers recommend conducting an objective
internal audit as well as an internal control audit program to help
track and document the changes and eliminate risks. Also, the
cooperative should offer discounts for early settlements to
increase cashflow that can benefit the firm, to produce income
and improve return on assets, businesses should improve their
services to be able to increase revenue and reduce expenses,
to be able to improve and mature an organization’s business
practices, internal control audit should be conducted objectively
and properly designed.Internal control audit program will help

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the company track and document any changes that have been
made to the environment and ensure the mitigation of any found
risks.The company should offer easy application to their
cooperative, ensure the safety of the member deposits, and
assist in financing the credit needs of the membership.
Because, proper management of those mentioned above will
greatly influence their organizational performance. In order to
maintain a healthy cash flow, the company should take positive
action when accounts receivable ages past its due date. The
billings should be controlled and be properly accounted for
because having too many delinquent accounts can bring the
business to a standstill. It is also vitally important to periodically
check and manage receivables to be able to adapt to constantly
changing market conditions. Moreover, relaxing payment
requirements will strongly impact company’s cash flow and
bottom line.One of the reasons why business owns asset is to
produce income.

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TABLE OF CONTENTS
Pages
TITLE PAGE
APPROVAL SHEET ii
ACKNOWLEDGEMENT iii
ABSTRACT V
TABLE OF CONTENTS xiii
LIST OF TABLES xvi
LIST OF FIGURES xviii
LIST OF APPENDICES xix
CHAPTER
1 THE PROBLEM AND A REVIEW OF RELATED
LITERATURE
Introduction 1
Background of the Study 3
Theoretical Framework 6
Conceptual Framework 9
Statement of the Problem 12

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Objectives of the Study 13

Hypotheses 13
Significance of the Study 14
Scope and Limitation 16
Definition of Terms 18
Review of Related Literature 20
2 METHODOLOGY
Research Design 39
Respondents and Locale of the Study 40
Sampling and Sampling Technique 40
Data Gathering Instruments 41
Data Gathering Procedures 41
Data Analysis 42
3 PRESENTATION, ANALYSIS, AND 44

INTERPRETATION OF DATA

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4 SUMMARY, CONCLUSION, AND

RECOMMENDATION
Summary of Findings 82
Conclusion 102
Recommendation 104
References 109

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LIST OF TABLES
Table Pages
1 Years Engaged in the Cooperative Industry 45
2 Types of Multi- Purpose Cooperative 46
3 Number of Employees 48
4 Frequency of Internal Audit 49
5 Current Return on Asset Ratio 50
6 Extent of Accounts Receivable Management 52

Practiced by Multi-Purpose Cooperatives in Las
Piñas City with regard to Credit Application

Piñas City with regard to Early Pay Discounts

Practice by Multi-Purpose Cooperatives in Las
Piñas City with regard to Debt Collection

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Pinas City with regard to Timely Invoicing
10 Effects of Credit Application on Return on Assets 68

Ratio
11 Effects of Early Pay Discounts on Return on 72

Assets Ratio
12 Effects of Debt Collection on Return on Assets 74

Ratio
13 Effects of Timely Invoicing on Return on Assets 78

Ratio

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LIST OF FIGURES
Figure Page
1 Conceptual Framework 10
“Accounts Receivable Management Practices”

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LIST OF APPENDICES
APPENDIX Pages
A Letter of Acceptance for Adviser xxi
B Letter of Acceptance for Evaluator xxii
C Letter to Respondents xxv
D Survey Questionnaire xxvi
E Statistical Findings xxxv
F Curriculum Vitae xl
G Certificate of Statistician xliv
H Certificate of Turnitin xlv
I Certificate of Grammarian xlvi

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Chapter 1
THE PROBLEM AND ITS BACKGROUND
Introduction
According to Fareed Siddiqui (2016), accounts receivable is
very important to an organization because it increases their
cash flow, leads to a good financial result and flexibility of the
company’s entity. Siddiqui also mentioned that all dues may be
collected on time and regularly if they review the accounts
receivable and they need to make sure the constancy of the
payments and made a follow up action. Also, the return on asset
ratio tells if the company is profitable through their assets.
Internal control consists of the plan an organization has
and all coordinated procedures and measures adopted within an
organization to ensure that its assets are safe, check the
correctness and if the accounting data is well-founded, promote

Las Piñas Campus
operational efficiency and encourage adherence to prescribed
managerial policies (Fernandez, 2017).
According to Dorota (2013), an important element of the
accounts receivable management in an enterprise is the control
and collection of receivables. Dorota (2013) added that these
should be of constant interest to the management of every
enterprise and should be continuously monitored. It should be
noted that an important tool for controlling and monitoring
receivables is grouping them according to the time and their
emergence because it facilitates the control. Lui (2013), on the
other hand, stated that return on assets may not be a perfect
measure, but it is the most effective, broadly available financial
measure to assess company performance. He also mentioned
that it captures the fundamentals of business performance in a
holistic way, looking at both income statement performance and
the assets required to run a business.

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While a useful place to start, researchers at present lack
information concerning the implementations of cooperatives in
order for their business to grow. This paper will review the
practices done by Multi – Purpose Based Cooperatives in Las
Piñas City to have an effective accounts receivable
management and ascertain if the return on assets ratio is a
relevant measure of business performance. Furthermore, this
study contributes to the business industry as it will give apparent
ideas and suggestions that local cooperatives may consider in
their efforts to be able to function and operate successfully their
businesses.
Background of the Study
According to Masuku (2016), cooperation is recognized
as the best possible alternative method of organizing business.
Providing members with services like savings, loans, trainings,
and buying and selling goods are the reasons why cooperative

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exists. Moreover, he added that members earn income through
the cooperatives, and also their purchasing power increases.
And in order for cooperative to survive and achieve its goals, it
must have a good internal control of accounts receivable
management and return on assets percentage. Because,
according to Jason Fernando (2016), accounts receivables may
be able to make more sales when dealing with regular and
reliable customers and may also reduce transaction costs.
Therefore, accounts receivable management is critical to a
firm’s growth and survival especially to multi – purpose
cooperatives.
According to Gallo (2016), return on assets tell what
percentage of every peso invested in the business was returned
as a profit. He added that ROA simply shows how effective a
company is at using assets like cash, facilities, machinery,
equipment, vehicles, inventory, etc. to generate profit.

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Furthermore, according to Daly (2017), ensuring that customers
pay their invoices is incorporated by accounts receivable
management. It helps prevent overdue payment or non-
payment. Daly (2017) stated, it is therefore a quick and effective
way to strengthen the company’s financial or liquidity position.
The researchers have chosen the topic because of its
significance and relation to their program Bachelor of Science in
Accounting Technology. The topic is quite interesting for them
as it is related to their subjects, Management Accounting.
Researchers would like to understand the internal control of
accounts receivable management and return on assets more
explicitly. Gaining understanding about this matter would greatly
contribute to their knowledge and intelligence which will be of
great help as the researchers will soonbe entering a new
environment as they graduate, the corporate world. Therefore,
the study aims to know the internal control of accounts

Las Piñas Campus
receivable management and return on assets of multi-purpose
in Las Piñas City.
Theoretical Framework
This study was anchored on Justin Johnson (2018), The
Best Practices for Accounts Receivables Management.
Accounts receivable is commonly one of an organization's
biggest and most unmistakable resources on the monetary
record. Overseeing such an expansive resource is a movement
of principal significance, as poor receivables the executives may
thwart income and cause the organization to acquire awful
obligation cost. Organizations ought to consider following a lot
of best practices while dealing with their receivables.
Credit Application
Organizations ought to require new clients to complete a
credit application before expanding credit. The credit application

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should gather the important data to play out an acknowledge
check, for example, the client's assessment recognizable proof
number or standardized savings number and the lawful name
and invented names utilized - DBA name - by the organization.
Require new clients to present a rundown of credit references
and get in touch with them to guarantee that the potential
customer is trustworthy.
Timely Invoicing
Timely invoicing is a fundamental practice to create to
facilitate installment from clients. Numerous clients usually pay
their invoices late as a major aspect of their accounting policy;
however, timely invoicing can nudge them to pay their invoices
faster. Since deferred installments from clients can profoundly
affect a small business' income, the significance of sending
client's their receipt in a convenient way is essential to keep up
an effective business.

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Early Pay Discount
Sales discounts to empower early installment are a best
practice that can improve the income of a business. The rebate
offered ought to be sufficient to give a motivation to the client to
pay the receipt inside the predefined time span, however little
enough to stay away from overall revenue disintegration. It is
fundamental to educate clients that the markdown won't be
regarded if installment is gotten after the discount date recorded
on the receipt, as this mitigates possibly harming showdowns
sometime in the not too distant future.
Debt Collection
It is essential to have an arrangement of activity when
endeavoring to gather an obligation from clients who are
delinquent. Endeavor to contact the client before making any
move, as this is the cheapest and quickest approach to
determine the obligation. However, it might be important to seek

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after different strategies, including mediation, arbitration and
referring the obligation to an external debt collection agency.
Mediation and arbitration are lawfully adequate ways that bring
the vendor and purchaser together to arrange a settlement.
Mediation enables the two gatherings to decide an answer;
mediation accommodates a goals controlled by a court
designated authority. Use debt collection agencies if all else
fails, as they can be costly and are not required to acknowledge
each case referred to them.
Conceptual Framework
In this section, the researchers will discuss the extent of
accounts receivable management practice in terms of credit
application, timely invoicing, early pay discounts, debt collection,
and return on assets ratio.

Las Piñas Campus
FIGURE 1
“Accounts Receivable Management Practices”
Independent Variables Dependent Variables
Accounts Receivable Practices
 Credit Application
Effective and Efficient
 Timely Invoicing
Accounts Receivable
 Early Pay Discount
 Debt Collection Management
Organization’s effectiveness and efficiency depends on
how they carry out their credit application, timely invoicing, early
pay discount and debt collection.In order to execute receipt,
they should have credit application that gather all needed
information. New clients’ needs to yield a list of credit references

Las Piñas Campus
and contact them to confirm that the latent client is responsible.
Advanced payment from customers is a valuable practice in
timely invoicing. The significance of forwarding customer’s
invoice in a timely manner is essential to perpetuate a
successful business. Late payments can have an intense impact
in the small business’s cash flow. The best practice to persuade
members to pay early is sales discount. It can cultivate the cash
flow of an enterprise. It is very important to always notify the
customers and clients that the discount is recognize only on the
agreed date. Having a plan of action when it comes to intending
to collect a debt from customers who are neglectful is important.
To settle the debt collection, it is better to communicate
personally to the customer. The Return on Assets (ROA) ratio
shows the relationship between earnings and asset base of the
company.

Las Piñas Campus
Statement of the Problem
This research study focused on Internal Control of Accounts
Receivable Management and Return on Assets of Multi-
Purpose Based Cooperatives in Las Piñas City.
Specifically, it aims to answer the following questions:
1. What is the profile of the respondents with regard to the
following :
1.1 Years engage in the Cooperative Industry
1.2 Types of Multi-Purpose Cooperatives;
1.3 Average Number of Employees;
1.4 Status of their internal control auditing;
1.5 Status of their Organizational Profitability
2. To what extent does accounts receivable management
being practice by multi-purpose cooperatives in terms of;
2.1 Credit application
2.2 Timely invoicing

Las Piñas Campus
2.3 Early pay discounts
2.4 Debt collection
3 Do timely collection and proper management of
receivables greatly affect the return on assets of the Multi-
Purpose Cooperatives as shown by the level of agreement
perceived by the respondents?
Objectives of the Study
There are two main objectives of conducting this study.
First is to determine the extent on how multipurpose
cooperatives practice accounts receivable management in their
cooperative. Second is to verify if the timely collection and
proper management greatly affect the return on assets of the
cooperatives.
Hypotheses
The researchers tested the following hypotheses at 0.01
level of significance.

Las Piñas Campus
Ho1 The cooperatives does not practice accounts receivable
management.
Ho2 Timely collection and proper management does not affect
the return on assets of cooperatives.
Significance of the study
The study focused on explaining the Internal control
Accounts Receivable Management and Return on Assets of
Multi-Purpose Based Cooperative in Las Piñas City. Vital result
of this study could be highly significant and beneficial
specifically to the following:
Cooperatives. This paper may be able to distinguish the
impotence in the initiated receivable management procedures
and policy of the cooperatives, if they will recognize this paper, it
may give them a knowledge on how to improve their company’s
accounts receivable management practices.

Las Piñas Campus
Employees. This study is important to employees because
internal control is critical to communicate documentations with
the company’s external auditors and within the organization. By
following internal controls documentation, employees may get a
better understanding of the company processes and practices,
which helps to establish the company’s practices.
Members of the Cooperative. This study may be able to
vigilantly apprise the way of ownership of the members and their
cooperation so that they will understand and become an active
member in an organization. This will give them knowledge on
how to own and invest in a cooperative.
Government/ Cooperative Development Authority. This
paper is important to Cooperative Development Authority to
make sure that the internal control of cooperatives adopt system
and procedures that will deal to safety of organization’s assets,
check if their accounting data is precise and well-founded,

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promote organized operation and motivate conformity to
advocate managerial rules.
School. This paper is significant to the school as it may be able
to add to their collection of research papers which they may
possibly present to others in the future.
Faculty Member. This study may provide information about
internal controls to interested faculty members.
Future researchers. Succeeding researchers and scholars that
will be conducting the same research in the future, this paper
may furnish them literature review.
Proponents/Researchers. This paper may improve
researchers’ understanding when it comes to analyzing, data
gathering and reporting.
Scope and Limitation
This study focused on the Internal Control of Accounts
Receivable Management and Return on Assets of Multi –

Las Piñas Campus
Purpose Based Cooperatives in Las Piñas City. Convenience
Quota-Sampling technique was used in choosing the
respondents for the study. Quota sampling method is a non-
probability sampling in which the researcher will gather a
representative data from a group. Among 20,792 cooperatives
registered in the Philippines, about 2,000 are located in Metro
Manila, and 25 cooperatives are situated in Las Piñas City. The
researchers decided to focus on Multi – Purpose Based
Cooperatives which is 54% of the total number of cooperatives
in Las Piñas City. The interview was done based on the
availability of times, finances, etc. of the multi- purpose based-
cooperatives.
The researchers considered working on this study to
ascertain how the cooperative companies manage their
accounts receivables to achieve their goals and objectives.

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Definition of Terms
The researchers made an effort to provide a common
understanding that are used in the research study to avoid the
loss of value through misconceived of the words.
Accounts Receivable. It is a money owed to a company by its
debtors. Operationally, it is the independent variable. It is
something used as pledge for repayment of a gain of
cooperatives.
Cooperative. It is a business that is owned and control by and
for the benefit of its members. Operationally, in this study, multi-
purpose basedcooperatives in Metro Manila are the main
respondents.
Internal Control. It is a business practice to ensure that the
organization achieved their objectives in effectiveness and
efficient manner, precise financial reports and obeying with the

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laws and regulations. Operationally, in this study, internal
control of cooperatives in the main focus.
Management. Theoretically, it is the practice on how to deal
and control things and people.
Operationally, management pertains to managing of accounts
receivable of multi-purpose-basedcooperatives in Metro Manila.
Return on Asset. It indicates how profitable a company is in
terms of its total assets. Operationally, return on asset is
computed by dividing net income over average total asset or by
multiplying net profit margin and total asset turnover.
SPSS. Statistical Package for the Social Sciences (SPSS) is a
software package used in statistical analysis of data.
Operationally, SPSS was used to make a statistics and tables of
the research.

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Review of Related Literature
This review of related literature manifests the accounts
receivable management practices and its effect on the
cooperatives’ return on assets. It includes accounts receivables,
internal control of accounts receivable, internal control definition
and its elements, return on assets, cooperatives, and
cooperatives in the Philippines.
Accounts Receivables
Accounts receivable refers to the balance of money due to
the goods or services used or delivered but not yet paid by the
customers. It measures the unpaid claims a firm has over its
customers at a given time, usually comes in the form of
operating line of credit and is mainly due within a relatively short
time period (up to one year).
Accounts receivables represent large investment in asset
and involve significant volume of transactions and decisions that

Las Piñas Campus
is why this are one of the most important part of working capital.
However, there are considerable differences in the level of
receivables in firms around the world.
Accounts receivable management is a crucial field of
corporate finance because of its effects on a firm’s profitability
and risk, and consequently on the firm's value. Yet, the main
body of the literature of accounts receivables focuses on
studying the relation with firm’s profitability at the developed
capital markets and during the non-crisis period (Denčić-
Mihajlov, 2013).
Internal Control of Accounts Receivable
According to Ishaku Umar (2018), the purpose of internal
control of accounts receivable is to assure that all the receipt
are recorded appropriately and that customers pay without
delay and in accordance with the agreed terms of business.

Las Piñas Campus
In order to reduce the risk of asset loss and help secure
that plan information is perfect and precise, well-founded
financial statements, and that the plan follows the laws and
regulation, accountant and bookkeepers need a system for the
internal control methods for accounts receivable.
Here are the list of accounts receivable procedures for
internal control:
Policy and procedures
To make sure that all staff and employees understand the
process of accounts receivable, the company should explain
and give the proper policies and procedures such as lending
and collection policies.
Segregate the duties of the employees and staff
According to Shelby Williams (2012), a main concept of
internal controls in a organization is the segregation of the

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duties among the staff and employees. It can help to avoid error
and fraud within the organization.
It can be considered as the supreme policies and
procedures that enclose accounts receivable. It is very hard to
apply for the small business that’s why they are doing their best
to divide the duties to their employees to avoid any kind of
misappropriation (Freedman, 2018).
They should have different people who deal with the
specific jobs. They should segregate the task among the
employees to avoid bias and theft in an organization.
Internal Control Definition and its Elements
Definition
According to Osmond Vitez (2017), to ensure that they
meet their objectives and goals in the market, internal control is
used because it has better standards and proper rules.

Las Piñas Campus
Internalcontrol is all of the policies and procedures management
uses to achieve the following goals. Profitability is also achieved
from controlling their costs and limit their expenses.
They used goals such as protect the assets of the
organization- A reliable internal controls protect assets at all
cost, secure financial information- Internal control make sure
that the organization has precise, convenient and absolute
information, ensure compliance, the organization is secured by
internal control with the federal, state and regional laws that
affect the organizations' operation, encourage the organization
to have efficient and effective operations - Managers and staff
has an environment that maximize the effectiveness and
efficiency of their work because of internal control, and meeting
organization's goals and objectives - Internal controls can
monitor the achievement of the company's goals and objectives.

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Elements
Accounting Control
Accounting control is the manner in which processes are
configured to manage risk within an organization. The targets of
internal control are to safeguarding the loss of assets, entrench
that financial statements’ result are free from errors, making
sure that objectives are met in an effective and efficient manner,
and to ensure that laws and regulations are followed.
The system of accounting control may contain dozens or
hundreds of separate control activities that are intended to work
within the specific characteristics of a business. Thus, the
accounting controls for a manufacturer are different from those
of a distributor and retailer, even though all three firms may
operate within the same.

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Management control
Management control is the actions of individuals or
groups within an organization are constrained to perform certain
actions while avoiding other actions in an effort to achieve
organizational goals.
Return on Assets
According to Lan (2012), Return on assets is computed
by dividing the total assets to net income. It assessed how
productive a company is. If the company has a high return on
assets ratio then it means that they generating profit through
their assets.
According to Wilkinson (2013), Return on assets is used
by the company to generate revenue and considered as the
most important benchmark of the asset’s greatness in an
organization. If the company has low return on asset ratio, then

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it means that they required to have above-average level assets
and vice versa. If that’s the case, a company needs to earn
more money to continuously generating revenue. It is more
functional for shareowner to analyze the company’s solvency
and productivity to use the resources. Also, return on assets is
very important for the persons who run the business for them to
be able to measure the performance of the staff and employees
if they are doing well in achieving the business goals or market
competitors.
Cooperatives
A cooperative is an autonomous association of persons
united voluntarily to meet their common economic, social and
cultural needs and aspirations through a jointly owned and
democratically controlled enterprise.

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Multi-purpose Cooperatives
According to KoangKoangKuch (2013), It has a huge
number of tasks to remove. As the name specify, its control for
the different purpose for which it has been set up. It can work
for arranging credit, improved seeds, agricultural implements,
fertilizers, sanitation, health etc. for its members. Normally it
discharges the following functions
Roles of Cooperatives
The cooperative offer high standard goods and services.
It also invests in regional communities, the profit of the
cooperative stay within community, it creates a network that
strengthen the community, the purchasing cooperatives helps
local businesses, and the workers cooperative delegate job for
the community members.

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Cooperatives in the Philippines
According to Jamaldin (2013), Cooperatives in the
Philippines has seven principles:
First principle is anchored on voluntarism. Members are
not restricted by social, political or religious discrimination. They
joined voluntarily and that is how they become members of the
cooperative. Anyone who meets the set of qualifications which
is in accordance to their law can become a member, but only if
they are willing to shoulder the responsibilities.
Second aids democracy. Managers and officers are
elected. They are appointed in a manner agreed on by
members. Regardless of the amounts of members' shares, each
is entitled to one vote.
Third is the limitation of share capital interest. Interest on
a member share capital is limited so that those persons,
especially who have money can’t take advantage the equity in

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the coop. It prevents the domination of the coop’s affairs by
wealthy members at the expense of poorer members and the
organization as whole.
Fourth is the demonstration of the third principle which
revolves on the sharing all location of cooperatives surplus or
savings. It requires distribution of surplus equally so that all
members can gain based on their performance and not at the
expense of another
Fourth encompasses on the sharing all location of
cooperatives surplus or savings, the demonstration of the third
principle. Equal distribution of surplus is required in this
principle. This will enable all members to benefit based on their
performance and not at the expense of another.
Fifth aids for the education, trainings, and techniques of
the cooperation. Its beneficiaries are the cooperatives members,
officers and employees.

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Sixth establishes on the promotion of cooperation. It is
done between cooperatives at local, national and international
levels.
Seventh devotes for the community. Through policies
endorsed by the cooperative members, the cooperative works
for its sustainable development.
Cooperative’s primary objective is to provide goods and
services to its members. It enables them to attain increased
income and savings, investments, productivity and purchasing
power and promote among them equitable distribution of net
surplus through maximum utilization of economies of scale,
cost-sharing and risk-sharing without however, conducting the
affairs of the cooperative for charitable purposes.
The cooperatives are financed through
Like commercial concerns, cooperatives are financed in a
variety of ways. They may get their operating funds from

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membership fees, common or preferred stocks, bonds, by
borrowing from banks, or from other sources. Many
cooperatives also finance themselves to a considerable extent
from members’ savings kept in the business in the form of
reserves.
Financed from its members
The cooperatives' operations help by members financed
through membership fees that was payable per year, services
fees, capital of the members, individual membership fees,
postponed payment to members.
Share capital of the members of cooperatives is entitled
as individual member's fidelity in the business. It also
considered as member's financial stake and it will only withdraw
when that particular member leaves the business.

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Financed from cooperative surplus
The funds that are created through the use of
cooperatives' surplus is one of the most important sources of
their capital. Since the rules stated that it will only be distributed
when the business is liquidated, it is considered as the long-
term source of funds. The cooperatives don’t need to pay
interest to use these funds.
This funds from preserve surplus is also called
"institutional capital" which represent the wealth owned by the
cooperatives.
Financed from outsiders
Cooperatives also use the external sources of funds to
run their business. These sources of fundsinclude the
donations, government agencies, banks and suppliers. External
source of funds may allocate as a grant, as a short term and
long-term loan and as a trade credit by the supplier.

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Synthesis
Cooperatives has several common types, and each type
has a role in the business. Without one of them, the rest will not
function. Leader must instill the team/members a sense of
commitment to goals which ultimately support the success of
the business. If leader don’t have a point on the horizon for the
people to see, it becomes harder for the people to commit to it
as goal. Providing a vision in a team is a key factor because it
adds focus and commitment. Pearl Jamaldin (2013), stated that
every cooperative aims to provide its members with goods and
services. It will then enable its members to attain increased
income and savings. It will also help them obtain productivity
and investments for their business.
According to Fareed Siddiqui (2016), accounts receivable
is very important to an organization because it increases their

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cash flow, leads to a good financial result and flexibility of the
company’s entity.
One of the indicators in measuring the accounts
receivable practices of a business is their internal control.
Effective internal control is beneficial in all cooperatives.
Implementing this begins with assessment of risk in the essence
of maybe someone commit fraud or theft or even misstate
financial performance. According to Ishaku Umar (2018, the
purpose of internal control of accounts receivable is to assure
that all the receipt are recorded appropriately and that
customers pay without delay and in accordance with the agreed
terms of business. System of internal control can address that
kind of risk. It is also a process or system that helps to assure
reliability, compliance, security, or efficiency. Accounts
receivables are one of the most important part of working
capital. Receivables often represent large investment in asset

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and involve significant volume of transactions and decisions.
Thus, internal control of accounts receivable purpose is to
ensure that sales invoices are properly recorded and that
customers pay promptly in accordance with the agreed terms of
business.
Another indicator that measures the accounts receivable
management is the return on asset ratio. Wilkinson (2013), said
that return on assets is used by the company to generate
revenue and considered as the most important benchmark of
the assets greatness in an organization. If the company has low
return on asset ratio, then it means that they required to have
above-average level assets and vice versa. If that’s the case, a
company needs to earn more money to continuously generating
revenue.
A cooperative membership is a cooperative ownership.
This economic model offers many advantages that owners and

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directors, staff and management, should all understand. The
advantages include the ability to serve members, build equity,
and share in the common wealth.
This study can help a lot of people understand the
process of money handling in cooperatives in general for future
investments. They will be given knowledge about the benefits
they will get and risk they will invest when they enter into a
cooperative business.
Gap Analysis
After careful consideration and understanding of the
materials presented, the researchers determined that
cooperatives in the Philippines are purely voluntary and being a
member or part of the cooperative needs trust. The researchers
will study more about their allocation of funds as well as its
return on asset as it goes hand in hand in creating a better and

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successful organization. Also, being that cooperatives build a
social network through cities, the researchers would like to know
more about its benefits in communities and how they help small
businesses in accruing their capital.
To create a better environment for these cooperatives,
they should invest in training their trusted employees and
member to enhance the workmanship of the cooperative. Being
a voluntary membership, cooperatives can conduct programs
that can encourage non-members in joining. They can give
scholarships to their members in studying management and
accountancy to help them handle their profit as well as training
existing employees to improve the cooperatives system. The
researchers would like to study more on how the cooperatives
can expand by adding technology and social media into the
process to spread the idea in joining a cooperative and to help
them analyze future investments in small businesses.

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Chapter 2
METHODOLOGY OF THE STUDY
Methodology
This chapter explains the method that were used to
conduct the research in the collection of data and a plan of how
the study was conducted. It presents research design,
respondents and locale of the study, sampling and sampling
technique, data gathering instruments, data gathering
procedures, and data analysis
Research Design
The study used the descriptive and quantitative research
method for the profile variables to be determined. The status
influences the internal control of accounts receivable
management of the respondents and the return on asset status
of their multi-purpose cooperative. Also, the researchers used
the comparative research method to determine if there are

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significant difference exist in the influence of the internal control
of accounts receivable management when tally accordingly.
Respondents and Locale of the Study
The chosen respondents for this study are the accounting
staffs, managers and regular employees of multi-purpose
cooperatives in Las Piñas City. The locale of this study will
apply Quota sampling method for the researchers in selecting
these branches.
Sampling and Sampling Technique
Quota-Sampling technique was used in selecting the
respondents for the study. Quota sampling method is a non-
probability sampling in which the researchers will gather a
representative datafrom a group. To achieve research objective,
the researchersacquired information from 85% of the total
number of multi-purpose cooperatives in Las Piñas City. Nine

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cooperatives among 11 registered multi-purpose cooperatives in
Las Pinas City as of 2017, would be appropriate. They were
chosen due to the proximity and time of the researchers.
Data Gathering Instruments
Researchers used a survey questionnaire to retrieve data
for the study. Half (50%) of the draft of the survey questionnaire
was adapted from previous studies, while the other half was
constructed by the researchers themselves. A reliability test of
the result was conducted using SPSS.
Data Gathering Procedures
The researchers adapted a questionnaire that is suitable
for the study. A receivables questionnaire from a previous study
was re-modeled and re-written for the study’s specific
qualifications. The researchers will seek permission from the

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administration of the multi-purpose basedcooperatives for their
cooperation and understanding on this study.
The survey was distributed by the researchers together
with the company administrators. The answered survey
questionnaire was retrieved immediately after being answered
by the respondents. The researchers, then, tallied and validated
the results. The result was made in a tabular form and treated
statistically for the researchers to interpret.
Data Analysis
All data gathered will be treated confidentially, rest
assured that the information coming from the respondents will
not be publicized and for academic purpose only. Responses
that identified the assessment of the research study will be
collected, scored and tallied using descriptive and independent
t- test, which requires that both samples to be independently
collected, and tests the null hypothesis that both samples are

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from the same population and therefore do not differ in their
mean samples.

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Chapter 3
PRESENTATION, ANALYSIS, AND INTERPRETATION OF
DATA
This chapter discusses findings from the questionnaires
conducted by the students of University of Perpetual Help
System DALTA – Las Piñas City. The purpose of this study is to
identify the internal control of accounts receivable management
and return on assets of multi-purpose based cooperatives in Las
Piñas City.
Industry Profile of the Respondents
Tables 1 to 5 shows the frequency and percentage
distribution of the industry profile of the respondents with regard
to years engaged in the cooperative industry, types of multi-
purpose cooperative, number of employees, frequency of
internal control audit, and current return on asset ratio.

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Table 1
Industry profile of the respondents in terms of Years
Engaged in the Cooperative Industry
Industry Profile Frequency Percentage
Years
1. Less than 5 years 1 11.1
2. 11-15 years 5 55.6
3. 21-30 years 2 22.2
4. 30 years and above 1 11.1g
Total 9 100.0
1.1 Years engaged in the cooperative industry
Table 1 presents the years that the cooperative is engaged
in the industry. It can be noted that 1 or 11.1% of the
respondents has been engaged for “less than 5 years” and “30
years and above”, and 5 or 55.6% of the respondents has been
engaged for “11-15 years”.
The data revealed that majority of the respondents has been
engaged in the cooperative industry for 11-15 years.

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This finding is somehow related to an article by Nembhard
(2014) which states that about 10% of cooperatives fail after the
first year of operation. After 5 years, 90% of cooperatives are
still in business. This is often because of the many people
involved in starting a cooperative and the high level of
community support for cooperatives
Table 2
Industry profile of the respondents in term of Types of
Multi-Purpose Cooperative
Types of Cooperative
1. Workers 1 11.1
2. Credit 5 55.6
3. Service 1 11.1
4. Transport 1 11.1
5. Marketing 1 11.1
Total 9 100.0
1.2 Types of Multi-Purpose Cooperative
Table 2 presents the types of multi-purpose cooperatives
the respondents cater for. It can be noted that 1 or 11.1% of the

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cooperatives cater Workers’ cooperative, Service cooperative,
Transport cooperative, and Marketing cooperative, while it can
be noted that 5 or 55.6% of the cooperatives are credit
cooperatives.
The data revealed that majority of the cooperatives are
credit cooperatives.
This finding is similar to an article by Bitonio (2011) which
states that credit cooperatives generate a common pool of funds
in order to provide financial assistance and other related
financial services to its members for productive and provident
purposes that is why most cooperatives are credit cooperatives.

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Table 3
Industry profile of the respondents in terms of Number of
Employees
Number of Employees
1. 1-9 employees 7 77.8
2. 100-199 employees 1 11.1
3. Volunteers 1 11.1
Total 9 100.0
1.3 Number of Employees
Table 3 presents the average number of employees in
the cooperative. It can be noted that 1 or 11.1% of the
cooperatives has 100-199 employees and volunteers, and 7 or
77.8% of the cooperatives has 1-9 employees.
The data revealed that majority of the cooperative has 1-
9 employees.
This finding is accurate because the multipurpose
cooperatives the researchers interviewed are not big

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organizations, and so they do not need too many employees to
operate efficiently.
Table 4
Industry profile of the respondents in terms of Frequency
of Internal Control audit
Frequency of Internal
Control Audit
1. Always 7 77.8
2. Sometimes 1 11.1
3. Once in a while 1 11.1
Total 9 100.0
1.4 Frequency of Internal Control Audit
Table 4 presents the frequency of internal control audit
on its accounts receivable management system. It can be noted
that 1 or 11.1% of the cooperatives “sometimes” and “once in a
while”, and 7 or 77.8% of the cooperatives “always” audit their
accounts receivable.
The data revealed that majority of the cooperative always
conduct an internal control audit on their account receivables.

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This finding is similar to a study by Hirsch (2016) where
he said that internal control audit is important because failure of
the internal audit function to detect a significant deficiency in
internal controls is a significant shortcoming in the internal audit
function’s work performance. That is why most the respondents
have high frequency of internal control audit.
Table 5
Industry profile of the respondents in terms of Current
Return on Asset Ratio
Current Return on Asset
Ratio
1. Average 6 66.7
2. Increasing 3 33.3
Total 9 100.0
1.5 Current Return on Asset Ratio
Table 5 presents the current status of the cooperatives’ return
on assets. It can be noted that 3 or 33.3% of the cooperatives

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has “average” current return on asset ratio, and 6 or 66.7% has
an “increasing” ratio.
The data revealed that majority of the cooperatives’
current return on asset ratio is increasing.
This finding is related to an article by Mcclure (2018)
which states that Return on Assets is a pure measure of the
efficiency of a company in generating returns from its
assets without being affected by management financing
decisions. Moreover, a high ROA is a tell-tale sign of solid
financial and operational performance.
Extent of Accounts Receivable Management practiced by
Multi-Purpose Cooperatives in Las Piñas City.
Tables 6 to 11 shows the results of accounts receivable
management of the multi-purpose cooperatives in Las Piñas
City with regard to credit application, timely invoicing, early pay
discounts, and debt collection.

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TABLE 6
Extent of Accounts Receivable Management Practiced by
Multi-Purpose Cooperatives in terms of Credit Application
Indicators of Credit Application Mean Adjectival
Interpretation
1. It is very easy to apply credit in 3.60 Moderately
the cooperative Practiced
2. Application fees are recorded 4.44 Moderately
periodically. Practiced
3. We provide a breakdown to 4.11 Moderately
where the membership and Practiced
application fees go.
4. We have a segregated 4.44 Moderately
responsibility in maintaining a Practiced
detailed accounts receivable
records in credit application.
5. The credit and collection write 4.60 Highly
off policies and procedures are Practiced
current and in writing.
6. The policies and procedures 4.67 Highly
are clearly stated and Practiced
systematically communicated.
7. The policies and procedures 4.89 Highly
support internal control. Practiced
Composite Mean 4.39 Moderately
Practiced
Legend: (4.50 – 5.00) – Highly Practiced; (3.50 – 4.49) – Moderately
Practiced; (2.50 – 3.49) – Practiced; (1.50– 2.49) – Poorly Practiced; and
(1.00 – 1.49) – Never Practiced.

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2.1 Credit Application
Table 6 shows the assessment of the cooperatives on
accounts receivable management with regard to credit
application. The respondents assessed that internal control of
accounts receivable management influenced the organizational
performance in terms of credit application to a “Moderately
Practiced” which obtained a composite mean of 4.39.
The individual indicators of credit application of the
internal control of accounts receivable management on the
decision making were assessed as follows: the indicator “It is
very easy to apply credit in the cooperative” obtained a mean of
3.60 and interpreted as “Moderately Practiced”; the indicator
“Application fees are recorded periodically.” obtained a mean of
4.44 and interpreted as “Moderately Practiced”; the indicator
“We provide a breakdown to where the membership and
application fees go.” obtained a mean of 4.11 and interpreted as

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“Moderately Practiced”; the indicator “We have a segregated
responsibility in maintaining a detailed accounts receivable
records in credit application.” obtained a mean of 4.44 and
interpreted as “Moderately Practiced”; the indicator “The credit
and collection write off policies and procedures are current and
in writing.” obtained a mean of 4.60 and interpreted as “Highly
Practiced”; the indicator “The policies and procedures are
clearly stated and systematically communicated.” obtained a
mean of 4.67 and interpreted as “Highly Practiced”; the indicator
“The policies and procedures support internal control.” obtained
a mean of 4.89 and interpreted as “Highly Practiced”.
The indicator “The policies and procedures support
internal control.” obtain the highest mean value while the
indicator “It is very easy to apply credit in the cooperative”
obtained the lowest mean value.

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It can be noted that regarding to the credit application of
internal control of accounts receivable management, there are
still minor difficulties when it comes to the management of the
credit application.
This finding is similar to the result of the study by Xiang
(2017) which they discussed that credit application still needs
improvement for the company’s betterment because before the
study, credit application is discouraged.

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TABLE 7
Multi-Purpose Cooperatives in terms of Early Pay
Discounts
Indicators of Early Pay Mean Adjectival
Discount Interpretation
1. The cooperative encourage 4.0 Moderately
its members to pay early to Practiced
avail discount.
2. It is beneficial for accounts 4.67 Highly
to be paid earlier then later. Practiced
3. The early pay discounts are 4.11 Moderately
recorded periodically. Practiced
Practiced
2.2 Early Pay discounts
accounts receivable management with regard to early pay
discounts. The respondents assessed that the internal control of

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performance in terms of early pay discounts to a “Moderately
The individual indicators of early pay discounts of the
decision making were assessed as follows: the indicator “The
cooperative encourage its members to pay early to avail
discount.” obtained a mean of 4.0 and interpreted as
“Moderately Practiced”; the indicator “It is beneficial for accounts
to be paid earlier than later.” obtained a mean of 4.67 and
interpreted as “Highly Practiced”; the indicator “The early pay
discounts are recorded periodically.” obtained a mean of 4.11
and interpreted as “Moderately Practiced”
The indicator “It is beneficial for accounts to be paid
earlier then later.” obtain the highest mean value while the
indicator “The cooperative encourage its members to pay early
to avail discount” obtained the lowest mean value.

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It can be noted that regarding to the early pay discount of
internal control of accounts receivable management, there are
still minor difficulties when it comes to the management of the
early pay discounts.
This finding is similar to the result of the study by Shelton
(2017) which stated that early pay discounts is seldom practiced
by their employees. Therefore, in the cooperatives, early pay
discounts is not necessary needed.

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TABLE 8
Multi-Purpose Cooperatives in terms of Debt Collection
Indicators of Debt Collection Mean Adjectival
Interpretation
1. The billings are controlled and 4.89 Highly
properly accounted. Practiced
2. Disputed accounts receivables 4.33 Moderately
handled by persons other than Practiced
those receiving the collections
are all recorded.
3. Aged accounts receivable 3.78 Moderately
balances are periodically Practiced
reviewed by supervisory
personnel.
4. Adequate procedures exist for 3.89 Moderately
follow up collection of delinquent Practiced
accounts.
5. Procedures exist to ensure that 4.11 Moderately
the interest and penalties are Practiced
properly charged on delinquent
accounts.
6. There are controls in ensuring 4.22 Moderately
that individuals with delinquent Practiced
accounts are precluded from
receiving additional credit.
Practiced

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2.3 Debt Collection
accounts receivable management with regard to debt collection.
The respondents assessed that the internal control of accounts
receivable management influenced the organizational
performance in terms of debt collection to a “Moderately
billings are controlled and properly accounted.” obtained a mean
of 4.89 and interpreted as “Moderately Practiced”; the indicator
“Disputed accounts receivables handled by persons other than
those receiving the collections are all recorded.” obtained a
mean of 4.33 and interpreted as “Moderately Practiced”; the
indicator “Aged accounts receivable balances are periodically

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reviewed by supervisory personnel.” obtained a mean of 3.78
and interpreted as “Moderately Practiced” ; the indicator
“Adequate procedures exist for follow up collection of delinquent
accounts.” obtained a mean of 3.89 and interpreted as
“Moderately Practiced”; the indicator “Procedures exist to
ensure that the interest and penalties are properly charged on
delinquent accounts.” obtained a mean of 4.11 and interpreted
as “Moderately Practiced”; the indicator “There are controls in
ensuring that individuals with delinquent accounts are precluded
from receiving additional credit.” obtained a mean of 4.22 and
interpreted as “Moderately Practiced”.
The indicator “The billings are controlled and properly
accounted.” obtain the highest mean value while the indicator
“Aged accounts receivable balances are periodically reviewed
by supervisory personnel.” obtained the lowest mean value.

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Therefore, it can be noted that regarding the
improvement of organizational performance cause by managing
accounts receivable to the debt collection, there are still minor
difficulties when it comes to the management of the debt
collection.
This finding is similar to the result of the study of ACM
(2015) which they discussed that having customers who delay
payments has become the common scenario in their company.
Unpaid dues or bad debt lead to restricted cash flows
hampering the growth of the business. Therefore, debt
collection plays a vital role in settling differences between the
cooperative and its members. It acts as solution provider at both
ends.

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TABLE 9
Multi-Purpose Cooperatives in terms of Timely Invoicing
Indicators of Timely Invoicing Mean Adjectival
Interpretatio
n
1. The responsibilities for 4.44 Moderately
maintaining detailed accounts Practiced
receivable records are
segregated from collections
disbursement and general
ledger posting functions.
2. All valid receivables are 4.44 Moderately
promptly recorded. Practiced
3. The total of departmental 3.56 Moderately
accounts receivable Practice
outstanding reconciles
periodically.
4. Delinquent accounts that are 3.78 Moderately
reviewed and considered for Practice
charge off on a timely basis.
Practiced

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2.4 Timely Invoicing
accounts receivable management with regard to timely
invoicing. The respondents assessed that the internal control of
performance in terms of timely invoicing to a “Moderately
responsibilities for maintaining detailed accounts receivable
records are segregated from collections, disbursement and
general ledger posting function .” obtained a mean of 4.44 and
interpreted as “Moderately Practiced”; the indicator “All valid
receivable are promptly recorded.” obtained a mean of 4.44 and
interpreted as “Moderately Practiced”; the indicator “The total of

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departmental accounts receivable outstanding reconciles
periodically” obtained a mean of 3.56 and interpreted as
“Moderately Practiced” ; the indicator “Delinquent accounts that
are reviewed considered for charge off on a timely basis”
obtained a mean of 3.78 and interpreted as “Moderately
Practiced”.
The indicator “The responsibilities for maintaining
detailed accounts receivable records are segregated from
collections, disbursement and general ledger posting function .”
and “ All valid receivable are promptly recorded.” obtain the
highest mean value while the indicator “The total of
departmental accounts receivable outstanding reconciles
periodically” obtained the lowest mean value.
improvement of organizational performance cause by managing
accounts receivable to the timely invoicing, there are still minor

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difficulties when it comes to the management of the timely
invoicing.
This finding is similar to the result of the study by Bryk
(2017) which they discussed that properly managing invoices is
another way to improved cash flow. Therefore, it is relevant to
be practiced by cooperatives to ensure that their bills are
generated and completed in a timely manner.
Effect of Accounts Receivable Management Practices to
Return on Assets of the Multi-Purpose Cooperatives
Tables 10 to 13 shows the effect of accounts receivable
management practices on return to asset ratio of the multi-
purpose cooperatives in Las Piñas City.
This finding is similar to the result by Hill (2018) which they
discussed that return on assets is relevant to cooperatives
because it measures how effectively an organization is utilizing
its assets to generate a profit. He added that internal control

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practices help reduce assets based, improved productivity,
lower costs, increase sales revenue and improved receivable.
Therefore, performing these practices regularly can help
improve return on assets.

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TABLE 10
Return on Assets of the Multi-Purpose Cooperatives in
terms of Credit Application
Mean Adjectival
Indicators of Credit Application Interpretation
1. The breakdown to where the 4.56 Major Effect

membership and application fees go
helps to properly manage net
income.
2. Segregating responsibilities in 4.56 Major Effect
maintaining a detailed accounts
receivable records in credit
application helps appropriately
handle accounts receivables.
3. Making credit and collection write 3.33 Neutral
off policies and procedures current
and in writing aids the timely
recording of receivables.
Composite Mean 4.15 Moderate
Effect
Legend: (4.50 – 5.00) – Major Effect (3.50 – 4.49) – Moderate Effect; (2.50
– 3.49) – Neutral; (1.50– 2.49) – Minor Effect; and (1.00 – 1.49) – No Effect.
3.1 Effect of Credit Application to Return on Assets Ratio
accounts receivable management with regard to return on

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assets. The respondents assessed that the internal control of
accounts receivable management practice in terms of credit
application affect the organizational performance in terms of
return on assets to a “Moderate Affect” which obtained a
composite mean of 4.15.
The individual indicators of return on assets of the
breakdown to where the membership and application fees go
helps to properly manage net income” obtained a mean of
4.56 and interpreted as “Major Affect”; the indicator
“Segregating responsibilities is maintaining a detailed accounts
receivable records in credit application helps appropriately
handle accounts receivables. ” obtained a mean of 4.56 and
interpreted as “Major Affect”; the indic ator “Making
credit and collection write off policies and procedures

Las Piñas Campus
current and in writing aids the timely recording of
receivables.” obtained a mean of 3.33 and interpreted
as “Neutral”.
The indicator “The breakdown to where the membership
and application fees go helps to properly manage net income”
and “Segregating responsibilities is maintaining a detailed
accounts receivable records in credit application helps
appropriately handle accounts receivables ”obtain the highest
mean value while the indicator “Making credit and collection
write off policies and procedures current and in writing
aids the timely recording of receivables.” obtained the
lowest mean value.
effect of credit application can moderately af fect the
return on assets ratio.

Las Piñas Campus
This finding is similar to the result by Hill (2018) which
they discussed that return on assets is relevant to cooperatives

Las Piñas Campus
TABLE 11
terms of Early Pay Discounts
Indicator of Early Pay Composite Adjectival
Discount Mean Interpretation
1. Early pay discounts that 4.56 Major Effect
are recorded periodically
improves Return on
Asset.
Composite Mean 4.56 Major Effect
Legend: (4.50 – 5.00) – Major Effect (3.50 – 4.49) – Moderate Effect; (2.50 –
3.49) – Neutral; (1.50– 2.49) – Minor Effect; and (1.00 – 1.49) – No Effect.
3.2 Effect of Early Pay Discounts in Return on Asset Ratio
accounts receivable management practice in terms of early pay
discount affect the organizational performance in terms of return
on assets to a “Moderate Effect” which obtained a composite
mean of 4.56.

Las Piñas Campus
The indicator “Early pay discounts that are recorded
periodically improves return on assets” obtained a mean of
4.56 and interpreted as “Major Effect”.
The indicator “Early pay discounts that are recorded
periodically improves return on assets” obtained the highest
as well as the lowest mean.
effect of early pay discount, it can surely affect the

Las Piñas Campus
TABLE 12
terms of Debt Collection
Indicator of Debt Collection Mean Adjectival
Interpretation
1. Having adequate procedures 3.56 Moderate
for follow-up and collection of Effect
delinquent accounts
increases Return on Asset.
2. Having billings controlled and 4.67 Major Effect
properly accounted for helps
accurately track receivables.
3. Having controls in ensuring 3.78 Moderate
that individuals with Effect
delinquent accounts are
precluded from receiving
additional credit improves the
Return on Asset.
Composite Mean 4.00 Moderate
Effect

Las Piñas Campus
3.3 Effect of Debt Collection in Return on Assets Ratio
accounts receivable management practice in terms of debt
collection affect the organizational performance in terms of
return on assets to a “Moderate Effect” which obtained a
composite mean of 4.00.
decision making were assessed as follows: the indicator
“Having billings controlled and properly accounted for helps
accurately track receivables” obtained a mean of 4.67 and
interpreted as “Major Effect”; the indicator ”Having adequate
procedures for follow-up and collection of delinquent accounts
increases Return on Asset.” obtained a mean of 3.56 and

Las Piñas Campus
interpreted as “Moderately Effect”; and the indicator
“Having controls in ensuring that individuals with delinquent
accounts are precluded from receiving additional credit
improves the” obtained a mean of 3.78 and interpreted as
“Moderately Effect”.
The indicator “Having billings controlled and properly
accounted for helps accurately track receivables” obtained the
highest mean while the indicator ”Having adequate
procedures for follow-up and collection of delinquent accounts
increases Return on Asset.” obtained a mean the lowest
mean.
Therefore, it can be noted that regardi ng the
effect of debt collection can moderately affect the return
on assets ratio.

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TABLE 13
terms of Timely Invoicing
Indicators of Timely Invoicing Mean Adjectival
Interpretation
1. Promptly recording all valid 4.67 Major Effect
receivables regulates the
management of accounts
receivable.
2. Reviewing and considering 3.67 Moderate Effect
delinquent accounts for
charge-off on a timely basis
helps properly track
receivables.
3. Segregating responsibilities 4.33 Moderate Effect
for maintaining detailed
accounts receivable records
are segregated from
collections, disbursement,
and general ledger posting
functions helps Accounts
Receivables be properly
managed.
Composite Mean 4.22 Moderate Effect

Las Piñas Campus
3.4 Effect of Timely Invoicing in Return on Assets Ratio
accounts receivable management practice in terms of affect the
timely invoicing organizational performance in terms of return on
assets to a “Moderate Effect” which obtained a composite mean
of 4.22.
decision making were assessed as follows: the indicator
“Promptly recording all valid receivables regulates the
management of accounts receivable” obtained a mean of
4.67 and interpreted as “Major Effect ”; the indicator
“Reviewing and considering delinquent accounts for charge-off
on a timely basis helps properly track receivables” obtained a

Las Piñas Campus
mean of 3.67 and interpreted as “Moderate Effect”; the
indicator “Segregating responsibilities for maintaining detailed
accounts receivable records are segregated from collections,
disbursement, and general ledger posting functions helps
Accounts Receivables be properly managed.” obtained a
mean of 4.33 and interpreted as “Moderate Effect”
The indicator “Promptly recording all valid receivables
regulates the management of accounts receivable” obtain the
highest mean value while the indicator “Reviewing and
considering delinquent accounts for charge-off on a timely basis
helps properly track receivables” obtained the lowest mean
value.
effect of timely invoicing can moderately affect the

Las Piñas Campus

Las Piñas Campus
Chapter 4
SUMMARY, CONCLUSION AND RECOMMENDATION
This chapter contains with the summary of findings, the
conclusions derived from the findings and recommendations for
further studies. The main objective of the study was to show
how does the Multi-purpose based cooperatives in Las Pinas
City practice their internal control of accounts receivable
management in their organization.
Specifically, the study aimed at determining the profile
of the respondents in terms of years engaged in their business,
types of multi-purpose cooperatives they are currently operating,
number of employees they have, frequency of internal control
audit and current return on asset ratio. At the same time, the
study aimed to determine the extent of accounts receivable
management practiced by the multi-purpose cooperatives in Las
Pinas City in terms of credit application, debt collection, early

Las Piñas Campus
pay discount and timely invoicing. Lastly, the researchers want
to ascertain the effect of accounts receivable management
practices to return on asset ratio in terms of credit application,
early pay discount, debt collection and timely invoicing.
Based on the results and findings, the following are the
findings of the study:
1.Profile of the Respondents
1.1 Years Engaged
1.1.1 1 or 11.1 % of the respondents is engaged in the
industry for “less than 5 years”.
industry for “30 years above”.
industry for “11 to 15 years”.
1.1.4 This implies that majority of the respondents are
engaged in the industry for 11 to 15 years.

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1.1.5 This result is similar to the study of Nembhard
(2014) which states that about 10% of cooperatives
fail after the first year of operation. After 5 years,
90% of cooperatives are still in business. This is
often because of the many people involved in
starting a cooperative and the high level of
community support for cooperatives.
1.2 Types of Multi – Purpose Cooperative
1.2.1 1 or 11.1 % of the respondents caters for a
“workers’ cooperative”.
“service cooperative”.
“transport cooperative”.
“marketing cooperative”.

Las Piñas Campus
1.2.5 5 or 55.6 % of the respondents caters for a “credit
cooperative”.
1.2.6 This implies that the majority of the respondents
caters for a credit cooperative.
1.2.7 This result is similar to the study of Bitonio (2011)
which states that credit cooperatives generate a
common pool of funds in order to provide
financial assistance and other related financial
services to its members for productive and
provident purposes that is why most cooperatives
are credit cooperatives.
1.3 Number of Employees
1.3.1 1 or 11.1 % of the respondents has “100 – 199
employees”.
1.3.2 1 or 11.1 % of the respondents has “volunteers”.

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1.3.3 7 or 77.8 % of the respondents has “1 – 9
employees”.
1.3.4 This implies that majority of the respondents has
1 to 9 employees.
1.3.5 This result is similar to the study of Reyes
(2014), because the multipurpose cooperatives
the researchers interviewed are not big
organizations, and so they do not need too many
employees to operate efficiently.
1.4 Internal Control Audit
1.4.1 1 or 11.1 % of the respondents conducts internal
control audit on accounts receivable management
system “sometimes”.
system “once in a while”

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system “almost always”.
1.4.4 This implies that the majority of the respondents
conducts internal control audit on accounts
receivable management system “almost always”.
1.4.5 This result is similar to the study of Hirsch (2016)
where he said that internal control audit is
important because failure of the internal audit
function to detect a significant deficiency in internal
controls is a significant shortcoming in the internal
audit function’s work performance. That is why
most the respondents have high frequency of
internal control audit.

Las Piñas Campus
1.5 Current Organizational Profitability
1.5.1 3 or 33.3 % of the respondents’ organizational
profitability is “increasing”.
1.5.2 6 or 66.7 % of the respondents’ organizational
profitability is “average”.
1.5.3 This implies that majority of the respondents’
organizational profitability is “average”.
1.5.4 This result is similar to the study ofMcclure (2018),
which states that Return on Assets is a pure
measure of the efficiency of a company in
generating returns from its assets without being
affected by management financing decisions.
Moreover, a high ROA is a tell-tale sign of solid
financial and operational performance.

Las Piñas Campus
2. Internal Control of Accounts Receivable Practices
2.1 Credit Application
2.1.1 The respondents assessed that internal control
of accounts receivable management influenced
the organizational performance in terms of credit
application to a “Moderately Practiced” which
obtained a composite mean of 4.39.
2.1.2 The indicator “It is very easy to apply credit
in the cooperative” obtained a mean of
3.60 and interpreted as “Moderately
Practiced”.
2.1.3 The indicator “Application fees are recorded
periodically.” obtained a mean of 4.44 and
2.1.4 The indicator “We provide a breakdown to
where the membership and application fees go.”

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obtained a mean of 4.11 and interpreted as
“Moderately Practiced”.
2.1.5 The indicator “We have a segregated
responsibility in maintaining a detailed accounts
receivable records in credit application.” obtained a
mean of 4.44 and interpreted as “Moderately
Practiced”.
2.1.6 The indicator “The credit and collection write off
policies and procedures are current and in writing.”
obtained a mean of 4.60 and interprete d as
“Highly Practiced”.
2.1.7 The indicator “The policies and procedures are
clearly stated and systematically communicated.”
“Highly Practiced”.

Las Piñas Campus
2.1.8 The indicator “The policies and procedures support
internal control.” obtained a mean of 4.89 and
interpreted as “Highly Practiced”.
2.1.9 This implies that majority of the respondents
practiced “The policies and procedures support
internal control” in terms credit application.
2.1.10 This result is similar to the studyof Xiang (2017)
which they discussed that credit application still
needs improvement for the company’s betterment
because before the study, credit application is
discouraged.
2.2 Early Pay Discounts
2.2.1. The respondents assessed that the internal control
of accounts receivable management influenced the
organizational performance in terms of early pay

Las Piñas Campus
discounts to a “Moderately Practiced” which
2.2.2. The indicator “The cooperative encourage its
members to pay early to avail discount.” obtained
a mean of 4.0 and interpreted as “ Moderately
Practiced”.
2.2.3. The indicator “It is beneficial for accounts to be paid
earlier then later.” obtained a mean of 4.67 and
interpreted as “Highly Practiced”.
2.2.4. The indicator “The early pay discounts are
recorded periodically.” obtained a mean of 4.11
and interpreted as “Moderately Practiced”.
practiced “It is beneficial for accounts to be paid
earlier then later” in terms of early pay
discount.

Las Piñas Campus
2.2.6 This result is similar to the study of Shelton
(2017) which stated that early pay discounts
is seldom practiced by their employees.
Therefore, in the cooperatives, early pay
discounts is not necessary needed.
2.3 Debt Collection
2.3.1. The respondents assessed that the internal control
the organizational performance in terms of debt
collection to a “Moderately Practiced” which
2.3.2 The indicator “The billings are controlled and
properly accounted.” obtained a mean of 4.89
and interpreted as “Moderately Practiced”.
2.3.3 The indicator “Disputed accounts receivables
handled by persons other than those receiving the

Las Piñas Campus
collections are all recorded.” obtained a mean
of 4.33 and interpreted as “Moderately
Practiced”.
2.3.4 The indicator “Aged accounts receivable
balances are periodically reviewed by supervisory
personnel.” obtained a mean of 3.78 and
2.3.5 The indicator “Adequate procedures exist for follow
up collection of delinquent accounts.” obtained a
Practiced”.
2.3.6 The indicator “Procedures exist to ensure that the
interest and penalties are properly charged on
delinquent accounts.” obtained a mean of 4.11
and interpreted as “Moderately Practiced ”.

Las Piñas Campus
2.3.7 The indicator “There are controls in ensuring that
individuals with delinquent accounts are
precluded from receiving additional credit.”
“Moderately Practiced”.
2.3.8 This implies that majority of the
respondents practiced “The billings are
controlled and properly accounted” in terms of
debt collection.
2.3.9 This result is similar to the study of ACM
(2015) which they discussed that having
customers who delay payments has
become the common scenario in their
company. Unpaid dues or bad debt lead to
restricted cash flows hampering the growth
of the business. Therefore, debt collection

Las Piñas Campus
plays a vital role in settling differences
between the cooperative and its members.
It acts as solution provider at both ends.
2.4 Timely Invoicing
2.4.1 The respondents assessed that the internal control
the organizational performance in terms of timely
invoicing to a “Moderately Practiced” which
2.4.2 The indicator “The responsibilities for maintaining
detailed accounts receivable records are
segregated from collections, disbursement and
general ledger posting function .” obtained a
Practiced”

Las Piñas Campus
2.4.3 The indicator “All valid receivable are promptly
recorded.” obtained a mean of 4.44 and
2.4.4 The indicator “The total of departmental
accounts receivable outstanding reconciles
periodically” obtained a mean of 3.56 and
2.4.4 The indicator “Delinquent accounts that are
reviewed considered for charge off on a timely
basis” obtained a mean of 3.78 and
practiced “The responsibilities for maintaining
segregated from collections, disbursement and
general ledger posting function” and “All valid

Las Piñas Campus
receivable are promptly recorded” in terms of
timely invoicing.
3. Return on Assets
3.1 The respondents assessed that the internal control of
accounts receivable management influenced the
organizational performance in terms of return on assets
to a “Moderate Effect” which obtained a composite mean
of 4.15.
3.2 The indicator “The breakdown to where the membership
and application fees go helps to properly manage net
income” obtained a mean of 4.56 and interpreted
as “Major Effect”
3.3 The indicator “Segregating responsibilities is maintaining
a detailed accounts receivable records in credit
application helps appropriately handle accounts

Las Piñas Campus
receivables. ” obtained a mean of 4.56 and
interpreted as “Major Effect”
3.4 The indicator “Making credit and collection write
off policies and procedures current and in writing
aids the timely recording of r eceivables.”
“Neutral”
3.5 The indicator “Early pay discounts that are recorded
periodically improves return on assets.” obtained a
mean of 4.56 and interpreted as “Major Effect”
3.6 The indicator “Having adequate procedures for
follow up and collection of delinquent accounts
increases return on assets.” obtained a mean of
3.56 and interpreted as “Moderate Effect”
3.7 The indicator “Having billings controlled and
properly accounted for helps accurately track

Las Piñas Campus
receivable.” obtained a mean of 4.67 and
interpreted as “Major Effect”
3.8 The indicator “Having controls in ensuring that
precluded from receiving additional credit
improves the return on assets” obtained a mean
of 3.78 and interpreted as “Moderate Effect”
3.9 The indicator “Promptly recording all valid
receivables regulates the management of
accounts receivable.” obtained a mean of 4.67
and interpreted as “Major Effect”
4.0 The indicator “Reviewing and considering
delinquent accounts for charge off on a timely
basis helps track receivables.” obtained a mean
of 3.67 and interpreted as “Moderate Effect”

Las Piñas Campus
4.1 The indicator “Segregating responsibilities for
maintaining detailed accounts receivable records
are segregated from collections, disbursement,
and general ledger posting functions helps
accounts receivables be properly managed.”
“Moderate Effect”.
4.2 This implies that majority of the respondents
answered that “Having billings controlled and
properly accounted for helps accurately track
receivable” and “Promptly recording all valid
receivables regulates the management of
accounts receivable” in terms of return om asset
ratio.

Las Piñas Campus
Conclusions
Based on the findings of the study, the researchers came
up with the following conclusions:
1. Majority of the respondents are engaged for 11 to 15
years in the industry. Also, majority of them cater for
credit cooperative and more than half of the total
population have 1 to 9 employees. Moreover, most of
the cooperatives conduct internal control audit on its
accounts receivable management system ‘almost
always’. Lastly, majority of the cooperatives’
organizational profitability is at average level.
2. The respondents assessed that the internal control of
accounts receivable management have a high level
rating. There is a strict management implementation of
internal control of accounts receivable to encourage its
members to pay early for discounts, to maintain detailed

Las Piñas Campus
accounts receivable record in credit application, to have
adequate procedures when it comes to debt collections
and to have timely invoicing.
3. The respondents assessed that theyare highly profitable
when it comes to their assets.

Las Piñas Campus
Recommendation
Based on the findings and conclusions, the researchers
recommend the following:
1. To be able to improve and mature an organization’s
business practices, internal control audit should be
conducted objectively and properly designed.
2. Internal control audit program will help the company
track and document any changes that have been
made to the environment and ensure the mitigation of
any found risks.
3. The company should offer easy application to their
cooperative, ensure the safety of the member
deposits, and assist in financing the credit needs of the
membership. Because, proper management of those
mentioned above will greatly influence their
organizational performance.

Las Piñas Campus
4. To be able to minimize risk of fraud, error, and loss,
the company should consistently record applications
fees and provide a breakdown to where the
membership and application fees go.
5. To be able to draw more members, the cooperative
must offer early pay discounts. Aside from it
encourages prompt payment, giving discounts also
helps build a strong relationship with its members.
Furthermore, giving customers a great value for a
good quality service can certainly improve their loyalty
to the cooperative.
6. The cooperative should offer discounts to its members
for early settlement because it will assist in increasing
cash flow which is beneficial to the firm itself.
7. In order to maintain a healthy cash flow, the company
should take positive action when accounts receivable

Las Piñas Campus
ages past its due date. The billings should be
controlled and be properly accounted for because
having too many delinquent accounts can bring the
business to a standstill.
8. It is also vitally important to periodically check and
manage receivables to be able to adapt to constantly
changing market conditions. Moreover, relaxing
payment requirements will strongly impact company’s
cash flow and bottom line.
9. To be able to ensure that a business is paid in a timely
and organized manner, it is important to pay attention
to cash flow and not allow too much time between
invoices. Don’t forget to send out invoices at the time
these have been set; sending a bill long after the work
was done disrupts the cash flow and may cause
accounting issues for the customers.

Las Piñas Campus
10. A cooperative should also define its accepted payment
methods and set up invoices to include a “payment
due by” date. In addition to letting the customers know
that they are expected to payment within a period of
time, it is helpful to include an actual date on the
invoice. Moreover, to ensure timely payment, the firm
can either charge a late fee, or even more effective,
offer a discount for early payment.
11. In order to have a basic building block of sustainable
risk management and internal controls for a business,
the company should have a segregation of duties.
12. One of the reasons why business owns asset is to
produce income. To be able to improve return on
assets of a business, it can reduce asset costs,
increase revenues, and reduce expenses.

Las Piñas Campus
13. To be able to achieve sustainable, inclusive growth in
the city, i.e. economic growth from which the poor also
benefit, the government should encourage investment
and trade activities.

Las Piñas Campus
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APPENDICES

University of Perpetual Help System Dalta xxi
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“Appendix A”
Letter of Acceptance for Adviser

University of Perpetual Help System Dalta xxii
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“Appendix B”
Letter of Acceptance for Evaluator

University of Perpetual Help System Dalta xxiii
Las Piñas Campus

University of Perpetual Help System Dalta xxiv
Las Piñas Campus

University of Perpetual Help System Dalta xxv
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“Appendix C”
Letter to Respondents

University of Perpetual Help System Dalta xxvi
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“Appendix D”
Survey Questionnaire
INTERNAL CONTROL OF ACCOUNTS RECEIVABLE

MANAGEMENT AND RETURN ON ASSETS OF
MULTI – PURPOSED BASED COOPERATIVES IN LAS PIÑAS
CITY
Part I
INDUSTRY PROFILE OF THE RESPONDENTS
Below are the indicating variables that will measure the

industry profile of the cooperative – respondents in relation to the
assessment of Internal Control of Accounts Receivable Management
and Return on Assets of Multi – Purpose Based Cooperatives in Las
Piñas City. Please put a check mark (✓) on the space provided that
corresponds to your answer. Please do not leave any questions
unanswered.
Cooperative Organizational Name (Optional):

_____________________________________________
Location (Specify the Barangay):
_____________________________________________
Position Held in the Cooperative:
_____________________________________________

University of Perpetual Help System Dalta xxvii
Las Piñas Campus
Years engaged in the Cooperative Industry:

___ less than 5 years ___ 16 – 20 years
___ 6 – 10 years ___ 21 – 30 years
___ 11 – 15 years ___ 31 years and above
What types of Multi-purpose Cooperative do you caters for?

___ Producers’ Cooperative ___Retail or Purchasing Cooperative
___Workers’ cooperative ___Housing Cooperative
___Consumers’ Cooperative ___ Complex cases and Multi – Stakeholder Cooperative
___ Credit or Financial Cooperative ___Service Cooperative
___Others, please specify: ________________________
Average Number of Employees including yourself:

___ 1 – 9 employees ___ 10 – 99 employees ___100 – 199 employees
Does the cooperative conduct internal control audit on its account receivable management
system?
___ Almost Always ___ Sometimes
___Every Once in a While ___Rarely ___ Never
Our current Organizational Profitability is:

___ Decreasing ___ Below Expected Level
___ Average Level ___ Increasing ___ High Level

University of Perpetual Help System Dalta xxviii
Las Piñas Campus
Part II
Assessment Instrument
The following instrument may reflect your opinion / perception

on Internal Control of Accounts Receivable Management and Return
on Assets of Multi – Purpose Based Cooperatives in Las Piñas City
which will serve as basis for improvement of organizational
performance in relation to the different determining factors used.
Kindly check your answer in the space provided with the following
options needed. Please answer them completely and be assured that
your answer will be treated confidentially.
Highly Practiced - 4.50 – 5.00

Moderately Practiced - 3.50 – 4.49
Practiced - 2.50 – 3.49
Poorly Practiced - 1.50 – 2.49
Never Practiced - 1.00 – 1.49
RATING
Indicators of Credit Application
5 4 3 2 1
1. It is very easy to apply credit in the
cooperative.
2. Application fees are recorded periodically.

University of Perpetual Help System Dalta xxix
Las Piñas Campus
3. We provide a breakdown to where the

membership and application fees go.
4. We have a segregated responsibility in
maintaining a detailed accounts receivable
records in credit application.
5. The credit and collection write off policies
and procedures are current and in writing.
6. The policies and procedures are clearly

stated and systematically communicated.
7. The policies and procedures support
internal control.
RATING
Indicators of Early Pay Discounts
5 4 3 2 1
1. The cooperative encourage its members

to pay early to avail the discount.
2. It is beneficial for accounts to be paid
earlier than later.
3. The early pay discounts are recorded
periodically.

University of Perpetual Help System Dalta xxx
Las Piñas Campus
RATING
Indicators of Debt Collection
5 4 3 2 1
1. The billings are controlled and properly
accounted.
2. Disputed accounts receivables handled
by person(s) other than those receiving the
collections are all recorded.
3. Aged accounts receivable balances are
periodically reviewed by supervisory
personnel.
4. Adequate procedures exist for follow-up
and collection of delinquent accounts.
5. Procedures exist to ensure that interest
and penalties are properly charged on
delinquent accounts.
6. There are controls in ensuring that
precluded from receiving additional credit.

University of Perpetual Help System Dalta xxxi
Las Piñas Campus
RATING
Indicators of Timely Invoicing
5 4 3 2 1
1. The responsibilities for maintaining
segregated from collections, disbursement,
and general ledger posting functions.
2. All valid receivables are promptly
recorded.
3. The total of departmental accounts
receivable outstanding are reconciled
periodically.
4. Delinquent accounts that are reviewed
and considered for charge-off on a timely
basis.

University of Perpetual Help System Dalta xxxii
Las Piñas Campus
Major Effect - 4.50 – 5.00

Moderate Effect - 3.50 – 4.49
Neutral - 2.50 – 3.49
Minor Effect - 1.50 – 2.49
No Effect - 1.00 – 1.49
Effect of Credit Application on Return RATING

on Assets 5 4 3 2 1
1. The breakdown to where the
membership and application fees go
helps to properly manage net income.
2. Segregating responsibilities in
maintaining a detailed accounts
receivable records in credit application
helps appropriately handle accounts
receivables.
3. Making credit and collection write off
policies and procedures current and in
writing aids the timely recording of
receivables.

University of Perpetual Help System Dalta xxxiii
Las Piñas Campus
Effect of Early Pay Discount on Return RATING

on Assets 5 4 3 2 1
1. Early pay discounts that are recorded
periodically improves Return on Asset.
Effect of Debt Collection on Return on RATING

Assets 5 4 3 2 1
1. Having adequate procedures for follow-
up and collection of delinquent accounts
increases Return on Asset.
2. Having billings controlled and properly
accounted for helps accurately track
receivables.
3. Having controls in ensuring that
precluded from receiving additional credit
improves the Return on Asset.

University of Perpetual Help System Dalta xxxiv
Las Piñas Campus
Effect of Timely Invoicing on Return on RATING

Assets 5 4 3 2 1
1. Promptly recording all valid receivables
regulates the management of accounts
receivables,
2. Reviewing and considering delinquent
accounts for charge – off on a timely
basis helps properly track receivables.
3. Segregating responsibilities for
maintaining detailed accounts receivable
records are segregated from collections,
disbursement, and general ledger posting
functions helps Accounts Receivables be
properly managed.

University of Perpetual Help System Dalta xxxv
Las Piñas Campus
“Appendix E”
Statistical Findings
Statistics
Type of
Multi-
Purpos Number Organiz
Years e of Internal ational
Engage Cooper Employ Control Profitabi
d ative ees Audit lity
N Valid 9 9 9 9 9
Missing 0 0 0 0 0
Frequency Table
Years Engaged
Frequenc Valid Cumulative
y Percent Percent Percent
Valid Less 1 11.1 11.1 11.1
than 5
11-15 5 55.6 55.6 66.7
21-30 2 22.2 22.2 88.9
30 above 1 11.1 11.1 100.0
Total 9 100.0 100.0

University of Perpetual Help System Dalta xxxvi
Las Piñas Campus
Type of Multi-Purpose Cooperative

Valid workers 1 11.1 11.1 11.1
credit 5 55.6 55.6 66.7
service 1 11.1 11.1 77.8
transport 1 11.1 11.1 88.9
marketin 1 11.1 11.1 100.0
g
Total 9 100.0 100.0
Number of Employees
Valid 1 - 9 7 77.8 77.8 77.8
100 -199 1 11.1 11.1 88.9
volunteer 1 11.1 11.1 100.0
s
Total 9 100.0 100.0

University of Perpetual Help System Dalta xxxvii
Las Piñas Campus
Internal Control Audit

Valid Almost 7 77.8 77.8 77.8
always
sometimes 1 11.1 11.1 88.9
Once in a 1 11.1 11.1 100.0
while
Total 9 100.0 100.0
Current Organizational Profitability

Valid Average 6 66.7 66.7 66.7
Increasin 3 33.3 33.3 100.0
g
Total 9 100.0 100.0

University of Perpetual Help System Dalta xxxvii
Las Piñas Campus i
Descriptive Statistics
Minimu Maximu Std.
N m m Mean Deviation
A1 9 1.00 5.00 3.5556 1.58990
A2 9 1.00 5.00 4.4444 1.33333
A3 9 1.00 5.00 4.1111 1.53659
A4 9 3.00 5.00 4.4444 .72648
A5 9 4.00 5.00 4.5556 .52705
A6 9 4.00 5.00 4.6667 .50000
A7 9 4.00 5.00 4.8889 .33333
B1 9 1.00 5.00 4.0000 1.22474
B2 9 3.00 5.00 4.6667 .70711
B3 9 1.00 5.00 4.1111 1.36423
C1 9 4.00 5.00 4.8889 .33333
C2 9 4.00 5.00 4.3333 .50000
C3 9 1.00 5.00 3.7778 1.71594
C4 9 2.00 5.00 3.8889 1.16667
C5 9 2.00 5.00 4.1111 .92796
C6 9 2.00 5.00 4.2222 .97183
D1 9 3.00 5.00 4.4444 .72648
D2 9 2.00 5.00 4.4444 1.01379
D3 9 2.00 5.00 3.5556 1.13039
D4 9 2.00 5.00 3.7778 .97183

University of Perpetual Help System Dalta xxxix
Las Piñas Campus
Valid N 9
(listwise)
Descriptive Statistics
Minimu Maximu Std.
N m m Mean Deviation
E1 9 3.00 5.00 4.5556 .72648
E2 9 3.00 5.00 4.5556 .72648
E3 9 2.00 5.00 3.3333 1.11803
E4 9 4.00 5.00 4.5556 .52705
E5 9 2.00 5.00 3.5556 1.23603
E6 9 4.00 5.00 4.6667 .50000
E7 9 3.00 5.00 3.7778 .83333
E8 9 4.00 5.00 4.6667 .50000
E9 9 2.00 5.00 3.6667 1.22474
E10 9 3.00 5.00 4.3333 .70711
Valid N 9
(listwise)

University of Perpetual Help System Dalta xl
Las Piñas Campus
Bacones, Ainee Natashia A.

18 Juliana Drive Casimiro Village
Pamplona III
Las Piñas City
(+63) 995 468 1193
aineebacones@gmail.com
 Tertiary Education:University of Perpetual Help System

DALTA
1740 Alabang-Zapote Rd. Almanza Uno Las Piñas City
 Secondary Education: Guildford Park Secondary School

Surrey, BC Canada
2012
Skills
Job Specific
 Basic Computer Skills
 Knowledge on Microsoft (Word, Excel, and PowerPoint)
 Costumer Service
 Process Money
 Organization Skills
Transferable Employability Skills
 Responsible and Considerate
 Precise and Analytical
 Adaptable and Self-Sufficient

University of Perpetual Help System Dalta xli
Las Piñas Campus

118 Cittadella Avenue, Cittadella Executive
Village Las Piñas City
(+63) 9194688007
trixcydevera@gmail.com
 University of Perpetual Help System DALTA

1740 Alabang – Zapote Road, Almanza Uno, Las Piñas City
 CAA National High School Annex

CAA Road, corner Balikatan, BF International Village, Las
Piñas City
2015
Skills
 Problem solving skill

 Responsible and punctual
 Communication and interpersonal skill
 Leadership skill
 Good listener and communicator
 Creativity and technical skills

University of Perpetual Help System Dalta xlii
Las Piñas Campus

T.S. Cruz Subdivision Almanza II,
Las Piñas City
(+63) 9052414540
kimzsofialagando@gmail.com

1740 Alabang – Zapoter Road, Almanza Uno, Las Piñas City
 San Roque Catholic School

Mendiola St., Alabang, Muntinlupa City
2015
Skills
 Problem Solving skills

 Flexible and can easily adapt in a new environment
 Oral and written communication skills
 Able to work in a team
 Able to speak English and Filipino fluently
 Responsible and resilient as a leader or as a member
 Excellent time management skills

University of Perpetual Help System Dalta xliii
Las Piñas Campus
Novila, Shaniah S.
Blk 6 Lot 11 Atis St. Golden Acres Subd.
Talon Uno, Las Piñas
City
(+63) 9271673145
shanahnovila@gmail.com

1740 Alabang – Zapoter Road, Almanza Uno, Las Piñas City
 Golden Acres National High School

Golden Acres Subd. Talon Uno Las Piñas City
2015
Skills
 Flexible and can easily adapt in a new environment

 Knowledge in Microsoft word/
 Responsible as a leader or as a member
 Excellent time management skills
 Friendly and outgoing person

University of Perpetual Help System Dalta xliv
Las Piñas Campus
“Appendix G”
Certificate of Statistician

University of Perpetual Help System Dalta xlv
Las Piñas Campus
“Appendix H”
Certificate of Turnitin

University of Perpetual Help System Dalta xlvi
Las Piñas Campus
“Appendix I”
Certificate of Grammarian

Internal Control of Accounts Receivable Management and Return On Assets of Multi Purpose Based Cooperatives in Las Pinas City. October 2018

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Internal Control of Accounts Receivable Management and Return On Assets of Multi Purpose Based Cooperatives in Las Pinas City. October 2018

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University of Perpetual Help System Dalta

Las Piñas Campus

INTERNAL CONTROL OF ACCOUNTS RECEIVABLE

An Accounting Technology Research

In Partial Fulfillment of the

Bacones, Ainee Natashia A.

College of Business Administration and Accountancy

This undergraduate thesis entitled “INTERNAL CONTROL OF

Antonio V. Maico Jr., CPA Amir T. Auditor, CPA, MSA

ORAL EXAMINATION COMMITTEE

Ryan Jay J. Carasco, CPA Amir T. Auditor, CPA, MSA

Annelen B. Marcos, CPA, MBA

Accepted and approved in partial fulfillment of the requirements for

Leticia C. Gamad, MBA, MAED, CFMP, DBA

College of Business Administration and Accountancy

TheResearchers wishes to express their deepest

appreciation to the following people who contributed to the

completion of this humble work. Indeed, we would not have

made it this far without their support; they are:

To Mr. Antonio V. Maico, CPA, our adviser, who

motivated us to further expand our knowledge and providing us

guidance and understanding throughout the process and

assisted us with patience.

To Mr. Amir T. Auditor, CPA, MSA,our Accounting

Technology Research professor, who gave us the golden

opportunity to do this research which helped us came to know

about so many new things in the field of accounting and

To our respondents, the employees of the Selected

Multi-Purpose Cooperatives in Las Piñas, for their willingness

College of Business Administration and Accountancy

to participate in the study, and steadiness in answering the

survey questionnaire amidst their busy schedule.

To our families and friends, for their encouragements,

unending patience and support to pursue this research.

And most of all to the Almighty GOD, for always guiding

College of Business Administration and Accountancy

Name of Institution : University of Perpetual Help

Address : Alabang-Zapote Road, Las Piñas

Title : Internal Control of Accounts

Authors : Bacones, Ainee Natashia A.

Degree : Bachelor of Science in Accounting

Major : Accounting Technology

Date Completed : October 2018

College of Business Administration and Accountancy

receivable management and return on assets of multipurpose

based cooperatives in Las Piñas City. It answered the questions

about the demographics, the extent of accounts receivable

management practiced, and the return on asset levels of the

multipurpose cooperatives. It utilized the descriptive-qualitative

research methods to answer the research questionnaire. The

respondents of the study are nine multipurpose cooperatives in

cooperatives to have an effective accounts receivable

management and ascertain if the return on assets ratio is a

relevant measure of business performance. Furthermore, this

study contributes to the business industry as it will give apparent

ideas and suggestions that local cooperatives may consider in

their efforts to be able to function and operate successfully their

College of Business Administration and Accountancy

The researchers used a receivables questionnaire from a

previous study which was re-modeled and re-written for the

study’s specific qualifications. Quota-Sampling technique was

used in selecting the respondents for the study. Quota sampling

method is a non-probability sampling in which the researchers