PERSONAL FINANCE SHORT TERM GOALS
-The activity or encompasses all aspects of -Are set each year and cover a 12-month
managing your own money. period.
-The process of determining a person's
financial needs or goals for the future and how to
INTERMEDIATE GOALS
achieve them. -Are set for 2-5 years.
They include making substantial, regular
PERSONAL FINANCIAL PLANNING contributions to savings or investments in order to
-best way to achieve financial objectives accumulate your desired net worth. Intermediate
-Planning which helps us define our financial goals bridge the gap between short- and long-
goals and develop appropriate strategies to term goals, and both intermediate and short-term
reach them. goals should be consistent with those long-term goals.
LONG TERM GOALS
FINANCIAL PLANNING -Long-term financial goals covering about
-increases the chance that your financial 6 years out to the next 30 or 40 years.
goals will be achieved and that you will have Although it’s difficult to pinpoint exactly what you
sufficient flexibility to handle such will want 30 years from now, it’s useful to
contingencies as illness, job loss, and even establish some tentative long-term financial
financial crises. goals.
FINANCIAL GOALS CAREER
-Results that an individual wants to attain. a job for which you are trained and in which it is
(Examples include buying a home, building a college possible to advance during your working life, so that
fund, or achieving financial independence.) you get greater responsibility and earn more money:
The Role of Money CAREER PLANNING
About 80% of Americans believe that money is
you can improve your work situation to gain
power, and about 75% say that it is freedom.
greater personal and professional
satisfaction.
MONEY
-is the medium of exchange used to measure Some of the steps are similar to the
value in financial transactions. financial planning process described earlier.
The Spender: You only live once Spenders see • Identify your interests, skills, needs, and values.
shopping as entertainment. They would rather • Set specific long- and short-term career goals.
have something tangible than something • Develop and use an action plan to achieve those
intangible like savings or an investment. Spenders goals.
have a hard time saving money. • Review and revise your career plans as your
situation changes.
The Builder: Make it so Builders see money as a ----------------------------------------------------------------------
tool. They use money to achieve their goals ACCOUNTING
and dreams. Examples include self-made -A system that identifies, records, and
millionaires, entrepreneurs, corporate leaders, and communicates relevant economic events to
dedicated hobbyists. Builders can miscalculate interested users.
risks or ignore the need for a margin of error. They -Is the process of recording, classifying, and
may start projects simply for the challenge but not summarizing, in a significant manner and in terms
finish them as the next new thing beckons of money, transactions, and events, which are part, at
least of a financial in character and interpreting the
results thereof.
The Giver: It’s better to give than to receive Givers -Is a service activity.
enjoy taking care of other people. They -It functions to provide quantitative information,
volunteer and give to charities. Givers commit their primarily financial in nature about economic entities
time, energy, and money to their beliefs. Most givers that are intended to be useful in making economic
simply enjoy making other people happy and doing decisions with reasoned choices among alternative
good deeds. Givers sometimes ignore their own courses of action.
needs and their long-term financial plans can
suffer as a result 4 PHASES OF ACCOUNTING
1. Recording
The Saver: A bird in the hand is worth two in the
-This is technically called bookkeeping.
bush Savers can accumulate significant wealth even -A systematic and chronological recording of
on a modest income. They tend to be organized business transactions, observing therein the
and to avoid money wasting activities. Although fundamental principles of accounting.
savers can be good investors, they can be too risk
, 2. Classifying 2. ACCOUNTS RECEIVABLE
Means the sorting of business transactions Are oral promises to the entity to receive cash at a
to their specific accounts. later date
This is the phase where items are sorted and Refer to customer’s account arising from
grouped. selling activities.
Similar items are being classified under the same This account refers to a trade account
name. receivable.
Importance of classifying accounts 3.SHORT-TERM INVESTMENT
-The reason for classifying account is for easy Marketable securities are very liquid short-term
summarizing. investments, such as U.S. Treasury bills or
certificates of deposit, held by the firm.
Because they are highly liquid, marketable securities
3. Summarizing are viewed as a form of cash (“near cash”).
After each accounting period, data recorded are
summarized through financial statements. 4. NOTES RECEIVABLE
These Financial statements are: Similar to accounts receivable
1. Income Statement Represents promises to the entity to receive cash
2. Balance Sheet at a later date
3. Statement of cash flows The main distinction that notes receivables are all
written, hence, more formal than accounts
4. Interpreting receivables
These are the accountant’s interpretation on Tend to have longer maturity dates than
the Financial statement. accounts receivables
This is called Analysis Report that must be Also called promissory notes
submitted together with the Financial reports.
5. MERCHANDISE INVENTORIES
Important to interpret include raw materials, work in process (partially
They should also be interpreted so they can be used finished goods), and finished goods held by the firm
appropriately in decision-making process. Refers to the merchandise of the company intended
for sale in the course of its business operation
STATEMENT OF OPERATION 6. PREPAYMENTS
*INCOME STATEMENT Is an amount simply paid in advance for goods
provides a financial summary of the firm’s or services anticipated to be received by the entity
operating results during a specified period. in the future
Most common are income statements covering a 1- For example: the company paid rent in advance for
year period ending at a specified date, one year
ordinarily December 31 of the calendar year.
The income statement is a report showing the 7 .FURNITURE AND FIXTURE
profit or loss for a business during a certain Part of the office's design and includes all large
period, as well as the incomes and expenses that furnishings, such as desks tables, chairs and book
resulted in this overall profit or loss. shelves.
8. OFFICE EQUIPMENT
STATEMENT OF FINANCIAL POSITION Directly related to the production.
*BALANCE SHEET
Also called the statement of financial position NON-CURRENT ASSESTS
Summary statement of the firm’s financial position at 1. FIXED ASSETS
a given point in time. Are what can be called as the most tangible,
The statement balances the firm’s assets (what it longest-serving assets a company can have
owns) against its financing, which can be either They are expected to not be converted into cash
debt (what it owes) or equity (what was immediately
provided by owners). and are regularly placed as means of production
Examples: land, land improvements, buildings,
CURRENT ASSETS machineries, equipment, furniture and fixtures
Short-term assets PPE (property, plant and equipment)
expected to be converted into cash within 1 year
or less. 2. LAND
Land owned by the company that is being used in
CURRENT LIABILITIES business.
Short-term liabilities It is classified as investment.
expected to be paid within 1 year or less.
3. BUILDING
The infrastructure owned by the company that is
-The activity or encompasses all aspects of -Are set each year and cover a 12-month
managing your own money. period.
-The process of determining a person's
financial needs or goals for the future and how to
INTERMEDIATE GOALS
achieve them. -Are set for 2-5 years.
They include making substantial, regular
PERSONAL FINANCIAL PLANNING contributions to savings or investments in order to
-best way to achieve financial objectives accumulate your desired net worth. Intermediate
-Planning which helps us define our financial goals bridge the gap between short- and long-
goals and develop appropriate strategies to term goals, and both intermediate and short-term
reach them. goals should be consistent with those long-term goals.
LONG TERM GOALS
FINANCIAL PLANNING -Long-term financial goals covering about
-increases the chance that your financial 6 years out to the next 30 or 40 years.
goals will be achieved and that you will have Although it’s difficult to pinpoint exactly what you
sufficient flexibility to handle such will want 30 years from now, it’s useful to
contingencies as illness, job loss, and even establish some tentative long-term financial
financial crises. goals.
FINANCIAL GOALS CAREER
-Results that an individual wants to attain. a job for which you are trained and in which it is
(Examples include buying a home, building a college possible to advance during your working life, so that
fund, or achieving financial independence.) you get greater responsibility and earn more money:
The Role of Money CAREER PLANNING
About 80% of Americans believe that money is
you can improve your work situation to gain
power, and about 75% say that it is freedom.
greater personal and professional
satisfaction.
MONEY
-is the medium of exchange used to measure Some of the steps are similar to the
value in financial transactions. financial planning process described earlier.
The Spender: You only live once Spenders see • Identify your interests, skills, needs, and values.
shopping as entertainment. They would rather • Set specific long- and short-term career goals.
have something tangible than something • Develop and use an action plan to achieve those
intangible like savings or an investment. Spenders goals.
have a hard time saving money. • Review and revise your career plans as your
situation changes.
The Builder: Make it so Builders see money as a ----------------------------------------------------------------------
tool. They use money to achieve their goals ACCOUNTING
and dreams. Examples include self-made -A system that identifies, records, and
millionaires, entrepreneurs, corporate leaders, and communicates relevant economic events to
dedicated hobbyists. Builders can miscalculate interested users.
risks or ignore the need for a margin of error. They -Is the process of recording, classifying, and
may start projects simply for the challenge but not summarizing, in a significant manner and in terms
finish them as the next new thing beckons of money, transactions, and events, which are part, at
least of a financial in character and interpreting the
results thereof.
The Giver: It’s better to give than to receive Givers -Is a service activity.
enjoy taking care of other people. They -It functions to provide quantitative information,
volunteer and give to charities. Givers commit their primarily financial in nature about economic entities
time, energy, and money to their beliefs. Most givers that are intended to be useful in making economic
simply enjoy making other people happy and doing decisions with reasoned choices among alternative
good deeds. Givers sometimes ignore their own courses of action.
needs and their long-term financial plans can
suffer as a result 4 PHASES OF ACCOUNTING
1. Recording
The Saver: A bird in the hand is worth two in the
-This is technically called bookkeeping.
bush Savers can accumulate significant wealth even -A systematic and chronological recording of
on a modest income. They tend to be organized business transactions, observing therein the
and to avoid money wasting activities. Although fundamental principles of accounting.
savers can be good investors, they can be too risk
, 2. Classifying 2. ACCOUNTS RECEIVABLE
Means the sorting of business transactions Are oral promises to the entity to receive cash at a
to their specific accounts. later date
This is the phase where items are sorted and Refer to customer’s account arising from
grouped. selling activities.
Similar items are being classified under the same This account refers to a trade account
name. receivable.
Importance of classifying accounts 3.SHORT-TERM INVESTMENT
-The reason for classifying account is for easy Marketable securities are very liquid short-term
summarizing. investments, such as U.S. Treasury bills or
certificates of deposit, held by the firm.
Because they are highly liquid, marketable securities
3. Summarizing are viewed as a form of cash (“near cash”).
After each accounting period, data recorded are
summarized through financial statements. 4. NOTES RECEIVABLE
These Financial statements are: Similar to accounts receivable
1. Income Statement Represents promises to the entity to receive cash
2. Balance Sheet at a later date
3. Statement of cash flows The main distinction that notes receivables are all
written, hence, more formal than accounts
4. Interpreting receivables
These are the accountant’s interpretation on Tend to have longer maturity dates than
the Financial statement. accounts receivables
This is called Analysis Report that must be Also called promissory notes
submitted together with the Financial reports.
5. MERCHANDISE INVENTORIES
Important to interpret include raw materials, work in process (partially
They should also be interpreted so they can be used finished goods), and finished goods held by the firm
appropriately in decision-making process. Refers to the merchandise of the company intended
for sale in the course of its business operation
STATEMENT OF OPERATION 6. PREPAYMENTS
*INCOME STATEMENT Is an amount simply paid in advance for goods
provides a financial summary of the firm’s or services anticipated to be received by the entity
operating results during a specified period. in the future
Most common are income statements covering a 1- For example: the company paid rent in advance for
year period ending at a specified date, one year
ordinarily December 31 of the calendar year.
The income statement is a report showing the 7 .FURNITURE AND FIXTURE
profit or loss for a business during a certain Part of the office's design and includes all large
period, as well as the incomes and expenses that furnishings, such as desks tables, chairs and book
resulted in this overall profit or loss. shelves.
8. OFFICE EQUIPMENT
STATEMENT OF FINANCIAL POSITION Directly related to the production.
*BALANCE SHEET
Also called the statement of financial position NON-CURRENT ASSESTS
Summary statement of the firm’s financial position at 1. FIXED ASSETS
a given point in time. Are what can be called as the most tangible,
The statement balances the firm’s assets (what it longest-serving assets a company can have
owns) against its financing, which can be either They are expected to not be converted into cash
debt (what it owes) or equity (what was immediately
provided by owners). and are regularly placed as means of production
Examples: land, land improvements, buildings,
CURRENT ASSETS machineries, equipment, furniture and fixtures
Short-term assets PPE (property, plant and equipment)
expected to be converted into cash within 1 year
or less. 2. LAND
Land owned by the company that is being used in
CURRENT LIABILITIES business.
Short-term liabilities It is classified as investment.
expected to be paid within 1 year or less.
3. BUILDING
The infrastructure owned by the company that is
