ABSTRACT
This research work surveyed the effect of Account Receivable in the management of government parastatals, with particular reference to the Enugu state water cooperation this research work endeavoured to probe into where the problems lie. The objective was to find out the effect of these accounts receivables. The financial record of the Enugu state water corporation (ESWC) was obtained to compare its accounts receivables with the total revenue greeted by that paraststal over a given period.
It was the opinion of the researcher that since various governments regulate the functions of their parastatals by not allowing full commercialization, those governments should line up to their own obligations by remitting adequate statutory duties of rendering services to the populace.
CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
According to Ajasa (2007), many business organizations in Nigeria have experienced liquidity problem largely because of the effects of the high inflationary rate. This has been necessitated by the various economic measure introduced in the country ranging from austerity measure introduced in 1982 to the structural adjustment program and the deregulation of the economy. As a result of these, it then becomes more necessary than ever to get money promptly from trade debtors for the day-to-day operations, because of uncertainty in the fluctuations of prices.
He further suggests that if all trade transactions were to be made on cash basis the companies in Nigeria would hardly do well in terms of sales turnover. This results form the fact that at the time of consumption, the liquidity position of the consumers may be such as not to allow the availability of enough cash to make on- the – spot payments in cash for such goods and services to be consume now and to pay at a later date, resulting in accounts receivable.
According to Bass (2006) accounts receivables represent claims usually stated in terms of a fixed amount arising from the sale of goods, the performance of service, the lending of fund or some type of transactions which establish relationship whereby one party is indebted to another. These claims result from the sale of goods or services and are sometimes neither supported by a written note or secured by specific collaterals. In that case, creditors have no right to lay hands on specific assets.