Appendix S

Validity Test

Research Title THE LEVEL OF KNOWLEDGE ON ACCOUNTING PRACTICES OF

SMALL BUSINESS OWNERS/MANAGERS IN TANAUAN CITY,
BATANGAS

To test the validity of the questionnaire, the statistician utilized Correlation Matrix
presented as Heatmap and validated using Kaiser-Meier Olkin’s Measure of Sampling
Adequacy (KMO). According to Nkansah (2018), examine the correlation matrix to determine
its factor suitability, suggesting a restraint on the use of the KMO.
The table below shows the guide for interpreting the Kaiser-Meier Olkin’s Measure of
Sampling Adequacy.
Guide for Interpreting KMO
Measure
KMO Measure Recommendation
≥ 0.90 Marvelous
0.80+ Meritorious
0.70+ Middling
0.60+ Mediocre
0.50+ Mediocre
≤0.50 Unacceptable

This statistic represents the degree to which each observed variable is predicted, without
error, by the other variables in the dataset. In general, a KMO < 0.6 is considered inadequate.
The statistician used Python Programming implemented in Replit IDE. According to
(Soundes and Ahlam, 2023), Python is commonly used for statistical data analysis due to the
availability of data frame objects such as pandas. Importing, cleaning, and transforming data in
preparation for statistical analysis is part of the process. The CSV file's dataset is thought to be
studied using Python libraries, which process all data from preparation to the ultimate result.
Python libraries such as pandas, statsmodels, seaborn, and others are widely used. That is
used to manage data analysis. Python does data representation, data comparison, data
visualization, data charting, data testing, indexing, alignment, missing data handling, and so
on. Such actions are useful in data analytics handled by various Python packages.
 PILOT TESTING
LEVEL OF KNOWLEDGE OF ACCOUNTING PRACTICES

Correlation Matrix Heatmap

Interpret the Correlation Matrix

The correlation coefficient ranges from -1 to 1. If the result falls -1 this is a perfect negative

linear relationship. Variables move in opposite directions. When one increases, the other tends

to decrease. If 0, No linear relationship. And if the result is 1, this indicates, A perfect positive

linear relationship. Variables move in the same direction. When one increases, the other tends

to increase as well. Closer to 1 or -1 means stronger relationship and closer to 0 means

weaker relationship. For instance, if two variables have a correlation coefficient of 0.7, There is

a strong positive linear relationship between them. When one variable increases, the other

tends to increase as well, and vice versa. The relationship is relatively strong but not perfect.
 PILOT TESTING
LEVEL OF KNOWLEDGE OF ACCOUNTING PRACTICES

Kaiser-Meier Olkin’s Measure of Sampling Adequacy

Keeping Records of Revenue and expenditure

KMO per Item KMO Total

0.612
0.885
0.647 0.682
0.612
0.733
KMO < 0.6 is considered inadequate

Interpretation: The KMO measures greater than 0.6 which indicates acceptable and valid

Keeping records of Sales and purchases

KMO per Item KMO Total

0.713
0.692
0.807 0.737
0.805
0.700
KMO < 0.6 is considered inadequate

Interpretation: The KMO measures greater than 0.6 which indicates acceptable and valid
 Determining the amount of overtime paid to employee

KMO per Item KMO Total

0.878
0.902
0.805 0.884
0.921
0.933
KMO < 0.6 is considered inadequate

Interpretation: The KMO measures greater than 0.6 which indicates acceptable and valid

Issuing bills to customers

KMO per Item KMO Total

0.775
0.681
0.630
0.697
0.799
0.617
KMO < 0.6 is considered inadequate

Interpretation: The KMO measures greater than 0.6 which indicates acceptable and valid

Paying supplier invoices

KMO per Item KMO Total

0.864
0.908
0.705 0.774
0.705
0.742
KMO < 0.6 is considered inadequate

Interpretation: The KMO measures greater than 0.6 which indicates acceptable and valid
 Payment of Taxes

KMO per Item KMO Total

0.661
0.743
0.896 0.740
0.852
0.555
KMO < 0.6 is considered inadequate

Interpretation: The KMO measures greater than 0.6 which indicates acceptable and valid

Payment of Statutory Benefits

KMO per Item KMO Total

0.802
0.786
0.918 0.830
0.859
0.794
KMO < 0.6 is considered inadequate

Interpretation: The KMO measures greater than 0.6 which indicates acceptable and valid

Follow all regulatory and legal requirement

KMO per Item KMO Total

0.617
0.710
0.617 0.669
0.774
0.679
KMO < 0.6 is considered inadequate

Interpretation: The KMO measures greater than 0.6 which indicates acceptable and valid
 Conduct of Inventory

KMO per Item KMO Total

0.652
0.665
0.758 0.739
0.800
0.840
KMO < 0.6 is considered inadequate

Interpretation: The KMO measures greater than 0.6 which indicates acceptable and valid

Python Program for the Correlation Matrix and KMO

 References

Mekki, S., & Ahlam, L. (2023). Statistical analysis with Python. ResearchGate.
https://www.researchgate.net/publication/369795464_Statistical_analysis_with_Python

Nkansah, B. K. (n.d.). On the Kaiser-Meier-Olkin’s Measure of Sampling Adequacy.

Mathematical Theory and Modeling, 8(7), 52–76.
https://iiste.org/Journals/index.php/MTM/article/download/44386/45790

Introduction to Replit | Replit Docs. (2023, October 10).

https://docs.replit.com/getting-started/intro-replit

Prepared by:

Engr. Ralph Laurence G. Visaya

Statistician and Data Engineer, Tanauan City College