Accounting is the method we use to count our assets, determine our liabilities, and realize our worth. I would say that mankind has always used accounting in some form, ever since realizing that the sun went down creating a day.
If we don 't keep track of our money, it tends to trickle out of our hands. I always think of the twenty dollar bill in my wallet; it keeps his value as long as I keep it as one bill but once I break it, even if I only spend a dollar, it just seems to disappear. One thing I hope to get out of this class is the knowledge of how to keep track of my money.
In discussing the accounting process, our text brings up three summary reports that are useful in personal finances: the income statement, cash flow statement, …show more content…
In real estate the word is location, location, location. In computer classes the word is save, save, save.)
The sentence that was left after the computer glitch, "The income statement is a summary of what comes in and what goes out." isn 't exactly accurate. Maybe the computer ate my homework because I was being flippant.
According to our text, "In personal finance, income is what is earned as wages or salary and as interest or dividends, and expenses are the cost of things consumed in the course of daily living. " (1) By using this explanation, gifts would not be included. Since alimony received is a form of income, I believe it would be considered income, while alimony paid is a recurring expense. So it isn 't exactly what comes and goes, it is more of an examination of specific income and specific expenses.
The income statement covers activity for a set period of time, such as monthly, quarterly or yearly. The income statement shows an easily read examination of where your money is …show more content…
It is the examination of what you did with the actual cash that flowed into your household during a certain period of time. This is where Alice 's loan repayment shows up. If she had sold a something she owned, like a dining room set she wasn 't using, this is where she would list the cash. Cash flow is tied to liquidity, which is how fast you can turn something into money. Stocks are rather liquid, you can sell them in just a couple of days. Real estate is less liquid, depending on the market you might find yourself holding on to something longer than you 'd
If we don 't keep track of our money, it tends to trickle out of our hands. I always think of the twenty dollar bill in my wallet; it keeps his value as long as I keep it as one bill but once I break it, even if I only spend a dollar, it just seems to disappear. One thing I hope to get out of this class is the knowledge of how to keep track of my money.
In discussing the accounting process, our text brings up three summary reports that are useful in personal finances: the income statement, cash flow statement, …show more content…
In real estate the word is location, location, location. In computer classes the word is save, save, save.)
The sentence that was left after the computer glitch, "The income statement is a summary of what comes in and what goes out." isn 't exactly accurate. Maybe the computer ate my homework because I was being flippant.
According to our text, "In personal finance, income is what is earned as wages or salary and as interest or dividends, and expenses are the cost of things consumed in the course of daily living. " (1) By using this explanation, gifts would not be included. Since alimony received is a form of income, I believe it would be considered income, while alimony paid is a recurring expense. So it isn 't exactly what comes and goes, it is more of an examination of specific income and specific expenses.
The income statement covers activity for a set period of time, such as monthly, quarterly or yearly. The income statement shows an easily read examination of where your money is …show more content…
It is the examination of what you did with the actual cash that flowed into your household during a certain period of time. This is where Alice 's loan repayment shows up. If she had sold a something she owned, like a dining room set she wasn 't using, this is where she would list the cash. Cash flow is tied to liquidity, which is how fast you can turn something into money. Stocks are rather liquid, you can sell them in just a couple of days. Real estate is less liquid, depending on the market you might find yourself holding on to something longer than you 'd