Question

In today's world, accounting plays a very vital role in everyone's life and it can positively and negatively affect one's life depending on how it is used. Basic accounting skills such as recording, analyzing, budgeting, researching and reporting are used in everyday life without realizing that these skills are applied. These accounting skills are very important when applied to one's daily life because it helps control and manages our life financially. Therefore, if these skills are not managed well, then it can negatively impact your life too. Financial accounting is something that we tend to apply to our everyday expenses. Some of these expenses include paying house mortgage, utilities, food, car insurances, college tuition and other expenses. In order to be able to pay for all these daily living expenses, I personally analyze my budget every month and alter my spending.A personal experience that I have encountered using accounting skills was when I was finishing my 3rd year of my undergrad degree. At that time, these skills became very helpful to me and affected my life positively. As a biology major, almost every single book for my classes cost on average of $150-$200. After going through some financial issues, I had to figure out on how to be able to pay for my books till graduating. I calculated my scholarship funds and figured out that every semester, I would receive a refund check of $375. Thus, I started researching all the online website to see which site would give me more money when buying used books back. After gathering all the different prices of each website, I decided to use Amazon as it seems to be giving me more money back. I created a spreadsheet in order to be able to record all the cash flow activates. After that, I started buying old books from all the students on campus for $15-$30and started selling them back on Amazon for $20-$50 each. At the end of my three months of selling old books on Amazon, I analyzed the data and saw that certain subjects would sell much more regardless of their edition and it would be more profitable. Therefore, I decided to buy only those specific subjects. In short, basic accounting skills has been very helpful for me without having a lot of knowledge of financial accounting because I am still continuing this business and my profit has been steady. I have been trying to budget wisely by always ensuring that my cash inflows are greater than my cash outflows.

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Answer 1

It is undoubtedly true that knowingly or unknowingly we use different accounting techniques in our day-to day life, whether or not we have an expert knowledge about it, because there is actually no need to have an expert knowledge and master in this paper to apply it in our life.

The simple technique of recording and analysing our daily expenses and preparing monthly budgets accordingly involves accounting techniques and without having expertise knowledge about this paper, a lay man also applies it in his daily life.

For example: if you are going out to have your dinner on the last day of the month and you are kind of on a budget, then you will definetly have a look a your remining money and decide where to go what to have according to your budget.

This is not just limited to Accountin; even one who has no knowledge about Science, still they use it in their daily life. Like changing flat tyre of car.