Accounting Assignment: Personal Finance, Transactions, and Budgeting

This assignment explores the application of accounting principles to personal finance, emphasizing the importance of managing personal transactions, creating budgets, and achieving financial goals. It discusses how individuals can use accounting to track income and expenses, manage debt, and plan for future needs such as retirement or education. The assignment highlights the benefits of keeping track of personal transactions, including increased financial awareness and the ability to identify spending issues. It also addresses the potential risks of not managing personal finances, such as difficulty in knowing account balances, increased vulnerability to financial fraud, and lack of control over spending habits. The provided solution references academic sources to support the concepts discussed.

Running Head: ACCOUNTING ASSIGNMENT
ACCOUNTING ASSIGNMENT
Name of the Student
Name of the University
Author Note

1ACCOUNTING ASSIGNMENT
Table of Contents
Accounting of Personal Transactions.........................................................................................2
Reference....................................................................................................................................4

2ACCOUNTING ASSIGNMENT
Accounting of Personal Transactions
Accounting is significant for everyone, who deals with the money. In business
organization, accounting purposes to provide financial information to their stakeholders such
as investors, creditors and management. Accounting measures as well as summarizes
company’s activities and communicates results to management and the other interested
parties. Further, at personal level, principles of accounting allows for creating budget and
helps in gaining true understanding of where money goes. Personal finances is all about
meeting the personal financial goals, which may be for planning for retirement, saving for
college education of child or for meeting short-term financial needs. This all depends on the
expenses, income, individual desires and goals and living requirements that comes up with
the plan for fulfilling those needs within the financial constraints. Hence, accounting of
personal finance becomes important (Dlamini & Kogeda, 2016).
Accounting is not only used by the companies rather, it is also used by the individual
for using it to manage personal finances. When managing the personal finances, it is
important to have clear knowledge and objective regarding one’s finance for creating
workable plan, which is right for the individual. The management of accounting for personal
finance includes creating budget, choosing right bank, paying taxes, managing debt, investing
money, planning for retirement and planning for when one dies. Moreover, there are various
benefits of keeping track of the personal transactions that is income and expenses in
organized manner. Some of the major benefits includes creation of financial awareness by
tracking expenses, identifying spending issues, sticking to budget, software or app makes it
easier and many others (Fourie et al. 2015).

3ACCOUNTING ASSIGNMENT
Keeping track of the personal transaction is quite important. However, if individual
does not keep track of the personal transactions, then some of the possible risks occurs, which
includes following:
 In case of not managing personal transaction, it will be difficult to know true balance
of one’s accounts.
 If personal transaction is not managed then, it will be difficult to know occurrence of
financial fraud.
 Last but not the least if personal transaction is not managed then individual will not be
having control over their money and they will majorly spend their money, which
results in having no amount of saving (Kaye et al. 2014).

4ACCOUNTING ASSIGNMENT
Reference
Dlamini, J. S., & Kogeda, O. P. (2016, December). A Mobile System for Managing Personal
Finances Synchronously. In International Conference on e-Infrastructure and e-
Services for Developing Countries (pp. 3-13). Springer, Cham.
Fourie, M. L., Opperman, L., Scott, D., & Kumar, K. (2015). Municipal finance and
accounting. Van Schaik Publishers.
Kaye, J. J., McCuistion, M., Gulotta, R., & Shamma, D. A. (2014, April). Money talks:
tracking personal finances. In Proceedings of the SIGCHI Conference on Human
Factors in Computing Systems (pp. 521-530).