What is accounting and how does it help you manage your personal finances?
: It is the recording of financial statements pertaining to a business (Fernando, 2023).
It is the act of recording keeping, analysing, summarizing, and reporting financial operations and
data for businesses, organisations, associations, governments, or individuals. Accounting is
significant in personal finance because it helps individuals track, manage, and plan personal
income and expenses. Accounting can be recorded in accrual or cash format recorded in journals,
ledgers, etc (Siegel & Yacht, 2009, p. 42).
Account significance in personal finances includes:
: accounting helps us to record, analyse, and plan personal budgets such as
income and expenses based on the monetary value a person has. It will guide personal
informed decisions on resource allocation, savings, and investing.
Personal Goal Setting
. Accounting presents a support system to plan, track, and report
personal financial goals. Such as saving for a mortgage, university education, retirement,
: Accounting knowledge can help an individual to have a personal
plan and decision on what to invest in such as bonds, stock, and properties, based on their
viability to return profit on investment.
: knowing accounting helps to plan our income and expenses which is
useful for annual tax filing and other personal audits related to taxation.
Describe the three products of accounting and bookkeeping procedures that are most
useful in personal financial planning: