Question

Assignment Details

This assignment has 3 parts:

Every business or organization must utilize accounting to record, summarize and report business transactions.  While the focus in this course is the use of accounting within a business, the same concepts can be used on a personal level.  

How can you use accounting to manage your personal finances? 

What are the benefits of keeping track of personal transactions – income and expenses – in an organized manner?  

What are some of the possible risks if you don’t keep track of personal transactions?

Answer 1

By the help of proper accounting we can manage-

1. we can keep total track on all transaction.

2. we can find out where our money have been spent.

3. we can find out how many money expended for particular nature of transactions such as rent expenses, travelling expenses.

4. we can prepare budget for following months/years.

5. By keeping proper and organised accounting we can track exact expenses and incomes.

6. We can figure out exact taxable income.

Benefits of keeping track of Personal Transactionn are -

1. by keeping track on transactions of income and expenses, we can get know how much amount spent on particular nature of transactions and prepare budgets so that over expenditure.

2. by keeping track we can make future plans of investments.

possible risks if we dont keep track of personal transactions-

1. misappropriation of cash can be done.

2. We cannot check how much amount spent on same nature of transactions.

3. it is not possible to locate amount expended over income.

4. We cannot find out how much savings we have done from particular income