Summary of Rationale, and Technical Introduction

Other articles on Domestic Well-Being Accounting, (DWBA), have given hints about the new ideas which underpin this new domestic model of accountants average salary. The rationale, ideas, and concepts of this article are summarized based on the content in the new book titled “Accounting for a Better Life”.

An account is simply a list of transactions related to one area of financial activity. The bank statement is the most commonly known form of account. Customers receive it from their bank every so often.

It is important to realize that accounts are meant for accumulating information about values. Because we are so used bank and credit cards accounts are all about currencies, sometimes people do not realize that accounts can also be useful for accumulating transaction information relating to investments, homes, and cars.

Accounts usually have two columns. One is for increasing (+), the other is for decreasing (-).

The next important concept to grasp is that there two distinct typesof accounts that we can use within our books or sets of accounts. One account is called an asset and the other is called a liability.

The asset bank account, as the name implies, is used for storing transactions for assets, such as houses, cars and banks. The idea is that positive amounts are used to signify increased value. Thus, PS500 being entered in the + Column of an Asset Account would mean an increase in PS500. But accountants may also have working accounts for their home accounting. These are accounts that are not for an asset, such as a vehicle or a house, but which they can use for business purposes. You can use these accounts to acquire assets or for depreciation.

The liability account is the other overall type . It’s used for accruing debts and/or liabilities. In the opposite direction, increasing amounts e.g. PS300 in this types account’s + column indicates more debt, or more liability. A decrease of PS200 is less debt. It might seem like more debt equals lower value. However, this all depends on the purpose of the liability accounts. Accounting professionals mainly use liability accounts to keep true debt amounts. However, there are times when they need additional accounts of the liability in order to process certain transactions. These are working accounts in home-accounting because they do NOT relate to true debts. For example, these are used for temporary information regarding asset acquisitions or growth in value of a house.