Accounting And How Does It Help You Manage Your Personal Finances?

770 Words Jul 8th, 2015 4 Pages
A. What is accounting and how does it help you manage your personal finances?
Accounting can be described as a way to communicate the financial health of a business or an organization to any and all interested parties. It is a way of assessing the assets, liabilities and cash flow, or the future of an entity for all current and future investors.(Rachel .S and Carol .Y,2009). This definition aptly points out the many functions of accounting to an organization,however accounting on a personal level also provides similar and much more functions,some of which include financial structure and security,aiding individuals in making sound decisions that guarantee sustainability. As an individual the ways in which accounting helps me manage my personal finances include but not limited to";

1)Structure: accounting ensures that individuals have a system that works with daily finances,this can easily manage their finances without the help of a professional. It puts spending habits into perspective,so that changes can easily be made to better improve a personal overall financial situation.

2)Analysis; accounting also helps with financial analysis. Individuals can easily ascertain the state of the finances,considering assets,liabilities,debts,and capital.

B. Describe the three products of accounting and bookkeeping procedures that are most useful in personal financial planning?

I believe the three most important products of accounting and bookkeeping that are most useful in…

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