Question

a. What is accounting and how does it help you manage your personal finances?

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

c. How could personal financial software assist you in your personal financial decisions?

Answer 1

A. Accounting primarily deals with book keeping and recording of finances i.e. cash in flow, outflow, revenues and expenses, assets and liabilities. It helps me manage by personal expenses by assisting in record keeping of my income and areas of spending. Also it assists in ascertaining my financial position i.e . assets and liabilities.

B. Income statement: Helps in determining the incomes and allocation of incomes to the expenses and savings.

Balance sheet: Is used to determine the financial position of an individual and to judge if he is high on debt and where assets must be increased to achieve financial balance.

Cash flow: The cash flow statement is helpful is estimating the cash inflows and out flows and check where the outflows can be cut down to reduce unnecessary expenses and purchases.

3. Question is not clear as to which software.