I graduated in Business school and I know Basic Accounting so important in our daily life. We just don't know but we use accounting everyday- the money comes in and money that goes out. Basically you don't need to graduate in Business school to understand all of the accounting cycle. Of course it is well worth once you are there and have a better understanding about the subject. It's all different stories once you study the accounting or wants to be an accountant.
There are only 3 words you should understand and how to manage your finances. Most of us screw up with these words.
- Asset- is an economic resources or whatever you own like a private property, one of the standard examples are cash, furnitures, homes, clothes,car and land. Remember all these assets my depreciate the value if you think a long term.
- Liability-is responsible for something. This is your debt and you have responsibility to pay in a short term or long term. One of the example is your house mortgage, car mortgage and your credit card.
- Income-is your monthly wages or salary.
Most people screw up with these 3 words and sometime they think liability is there asset and they forget about their income and that's we called a compulsive buyer. Some people forget that asset would depreciate and never think the long term.
Yes, we really need accounting with our daily lives. Actually, we can teach our family and influence them too.
ReplyDeleteI'm a CPA by profession and yes, it's very important to build some basic knowledge on accountancy to measure your performance and worth. Some people tend to just rely on cash at hand but don't know if their earning or not.
ReplyDeleteBasic accounting in college taught me these things.
ReplyDeleteThanks for a brief math lesson, It is true that we need basic accounting. We face situations daily that calls us to apply our knowledge with accounting.
ReplyDelete