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Three Products Of Accounting And Bookkeeping Procedures That Are Most Useful In Personal Finance

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1. What is accounting? How does accounting help you manage your personal finances?
Accounting is defined as keeping track and summarizing financial transactions. Keeping a list of personal finances will help you to see your spending habits. It also helps you see if there is any additional income in case you are thinking about borrowing money. This is always a good place to start. Evaluate your current situation and write a plan that might show a future situation. Since technology has grown over the years there are new factors that affect accounting. We have online bill pay with your bank and with the creditors. There are systems that track credit scores and it is always good to know that information because credit scores affect your impact …show more content…

Describe the three products of accounting and bookkeeping procedures that are most useful in personal finance planning?
The income statement plays a role in finances. The income statement lists income and expenses. These statements could be monthly, quarterly or yearly depending on how they are requested. The income statements could also be called personal finance statements. They should list personal information about the person, your current income balance and your liabilities balance. These are used when someone is trying to get an additional line of credit.
Another product of bookkeeping is cash flow statements. Cash flow statements show you where the income came from and by date. The cash flow statement didn’t start to become a factor of bookkeeping until 1987. A cash flow statement for an individual will list all sources of income not just salary. Be careful not to list income that could get reinvested. Then you want to list all of your expenses. Add the final totals and if you have a positive then your cash flow is healthy. If you have a negative it is time to look at your situation and make changes.
The last major product of accounting and bookkeeping is a balance sheet. A balance sheet will show your current income balance and list what outstanding debts you

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