Summary of Rationale & Technical Introduction
Others articles have mentioned the new ideas behind Domestic Well-Being Accounting. Based on information from the book ‘Accounting for a Better Life,’ this article summarises the reasoning, ideas and concepts from accountants glasgow.
An account, at its most basic, is a listing of transactions related to financial activity or interests. The bank statement, which customers receive periodically from their bank, is the most well-known form of account.
Accounts are used for accumulating value information. This is the first thing you need to understand. Bank and credit card accounts are often all about currency. However, people don’t realise that accounts can be used to accumulate transaction details related to our investments, home, or car.
Two columns will be found in most accounts. One for increasing (+) and one for decreasing(-) amounts.
It is important to realize that there are two different types account that we can use in our accounts or books. The first is an asset account, while the second is a liability.
As the name implies, the asset account stores transactions for assets such banks accounts, houses, cars, and so on. The idea behind this is to have positive amounts placed in the + column on an asset account signify an increase of value. So, for example, PS500 entering into the + columns of an asset accounts would indicate an increase of PS500. Accountants will also have what I refer to as working accounts for at-home accounting. This accounts is for accounts that are not specifically for an asset like a car or a home. These accounts can be used for asset acquisitions as well as depreciation.
A liability account is another type. This account is used to accumulate liabilities and/or debt. The reverse is true, in that increasing amounts, e.g. PS300 in the + column these type of accounts indicates more debt or greater liability, while a decrease in PS200 signifies less debt. While it might seem that less debt is better, it all depends upon the purpose of the liability account. Although accountants use the liability type account mainly to hold true amounts of debt, they may also require other accounts of liability for certain transactions. These accounts are known as working accounts in accounting at home because they do not relate directly to any debts. They can be used to accumulate temporary information about asset purchases and the growth of a home’s worth.