Application of business accounting in individual and household bookkeeping and financial decisions
Date Issued
2005
Date
2005
Author(s)
Chen, Yung-Yu
DOI
zh-TW
Abstract
Recently, because of the rapid growth of credit cards and cash cards, more and more people get used to over-consuming and paying loans by borrowing another loan. Such behavior results in serious consequences for them. It is because those loans don’t have to be paid out until many periods passed and many borrowers ignore the existence of these debts. Therefore, on and on, interests produce much more interests, and it ends up that almost all of their monthly salaries are paid to banks. If every borrower is able to have a thorough and correct understanding about his asset, debt, income and expenditure, he will realize that how serious it is to overspend.
Generally, people know little about their actual assets, debts, income and expenditure, so they are easily to make wrong financial decisions. Accounting is the guidance principles for business bookkeeping, helping it to know well about its assets, debts, income and expenditure. Since every individual and every household can be viewed as an epitome of a business, so it is appropriate to build up a bookkeeping method suitable for every individual and household by applying and adjusting business accounting methods.
The goal of this research is to study and elucidate the way of applying business accounting methods to individuals’ and households’ bookkeeping, so that every individual and household can get a thorough understanding about their own financial status, avoid personal financial crisis, and use this to be a good basis for active financial planning.
The method derived from this research is named as “modified ledger method”. It applies the spirit of business accounting, such as accrual basis, historical cost principal, and materiality principal, etc., so it has the good property and function of adequate and appropriate presentation in business accounting. Moreover, the “modified ledger method” is adjusted in the end of the period to simplify the bookkeeping process. In this way, it would be easier to understand how to implement by general people.
By making use of the “modified ledger method”, every individual and household can know well about their actual financial status. In summary, the exploration and disquisition of this research, the “modified ledger method” is certainly an ideal tool in helping every individual and household to evaluate its own financial status, and a basis to controlling budget, financing decisions, and even fulfilling investing goals.
Subjects
個人理財
家庭理財
改良式分類帳法
帳務
財務規劃
personal financing
household financing
modified ledger method
bookkeeping
finance planning
Type
other
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