Download Accounting 101 - Commitment with Our Neighbor

Education 1 – Mary Hess – Second half of Fall 2011 – FeAutor contribution
Student: Ricardo Berry Fonseca
There are words not uncommon in the Christian vocabulary: one of them is love your
neighbor, which includes honor debts with your neighbor. The Ten Commandments is part of
God’s unchanging will. It is true that we sometimes fail anyway, and that is why we have Christ
to comfort us by bearing our sins. Nonetheless, we should try to honor the 10 Commandments
anyway as Luther says in the Solid Declaration:
“[T]he law is a divine teaching in which the righteous, unchanging
will of God revealed how human beings were created in their nature,
thoughts, words, and deeds to be pleasing and acceptable to God.”
(Book of Concord, p. 584)
It is true that Christ is the ultimate comfort, because we often fail, because we are sinful;
still, Luther says later on the same Solid Declaration:
“However, [because we have Christ as the ultimate comfort] this
does not mean that they may abuse God’s grace and sin against it.”
(Book of Concord, p. 586)
Other words in the Christian vocabulary are endurance and suffering, as Paul says:
“Therefore, since we are justified by faith, we have peace with God
through our Lord Jesus Christ, through whom we have obtained
access to this grace in which we stand; and we boast in our hope of
sharing the glory of God. And not only that, but we also boast in our
sufferings, knowing that suffering produces endurance, and
endurance produces character, and character produces hope, and
hope does not disappoint us, because God's love has been poured
into our hearts through the Holy Spirit that has been given to us.”
(Rom 5:1-5 NRSV)
Keeping track of our finances is a burden. But it is a burden because hardly someone
knows how to keep track of it on a regular basis. And for that, we have some simple but helpful
tools that make ourselves more accountable with our money. The name of this tool? Accounting!
Let’s think about the places where we live… well, let’s think about my pair of socks…
Supposedly I have seven pair of socks, and three of them are my favorite ones – don’t ask me
why! I usually put all my seven pair socks in a specific drawer of the dresser in my bedroom
(which has five drawers). And (this is real!) I never group my pair socks accordingly, two by
two; I literally just throw them in the drawer that is specific for the socks… I didn’t follow my
mother’s lessons…yikes! I just want to “spend my time” with socks. And I think this is the most
efficient way… and sometimes it works.
But I could be a pretty (even more) hectic guy especially in the finals week. And
sometimes I throw them wherever I find a space – as long as all pairs of socks end up inside the
dresser! As we all know, pairs of socks are not a big object that I can easily find or keep track if I
don’t place them in the right place after my laundry. So…there we go! After two days, I cannot
find my socks – especially the favorite ones! And since I don’t group them really in pairs, all
becomes even worse! It’s all a complete mess, and I end up losing track of my socks, and I start
thinking I don’t have enough socks, that I should buy new socks, that my neighbor has sneakily
taken some of my socks (especially my favorite ones) between the time the laundry finished
drawing and I went down to pick up the laundry… But it is all my fault!
So, the fact that I didn’t “spend” my time with my socks made my life miserable in the
finals week!
And what about money? Is it common to lose track? I bet you have the same problem
with money as I have with my pair of socks.
Now, let’s keep in mind the example of the pair of socks and drawers: imagine I have
earned $300 – each $100 we call “a pair of socks”; so I have “three pair of socks”. If we don’t
keep track how the last $300 that came home (which was originally put in “drawer 1”) were
spent, life gets chaotic (remember my problem with the socks at home). Now, imagine that we
have spent the $300 in:

$100 in fixing the car (one “pair of socks” moved to “drawer 2”);

$100 in grocery shopping (one “pair of socks” moved to “drawer 3”);

$100 in public transportation and school materials for the kids (one “pair of
socks” “pair of socks” moved to “drawer 4”).
By keeping the account of both money (the pair of socks) and where we spent (the
drawers), we have a more organized finance (or home). That is the role of accounting.
Now, in practice, how does accounting work? All starts with something that has the
format… of a drawer!!! Well, at least sort of… But it is here that all the accounting starts; and
please I ask you to forget all the junk you have potentially and unsuccessfully learned so far
related to accounting – at least until the end of this document.
So, here is the accounting “drawer”:
Now, we place on the left side of the “drawer” all what comes in; and we put on the right
side all that comes out of the “drawer”:
All that comes
is place here.
All that leaves is
tracked here.
All that enters the “drawer” we count as positive; all that leaves is negative:
+
-
Now, let’s consider our 4 money “drawers” of our example:
“Drawer 1”
“Drawer 3”
“Drawer 2”
“Drawer 4”
So, let’s think about our $300 (“three socks”; remember?) placed in “drawer 1” – all that
enters go to the left side of the “drawer”. We have the following disposal of “pairs of socks” and
“drawers”:
“Drawer 1”
“Drawer 2”
$300
“Drawer 3”
“Drawer 4”
Now, second step! We have put each of the “pair of socks” (each of them is equivalent to
$100) in “drawer 2”, “drawer 3” and “drawer 4” respectively. Remember, all that is placed in the
“drawer” is accounted on its left side, and all that leaves the “drawer” is accounted on the right
side:
“Drawer 1”
$300
$300
“Drawer 3”
$100
“Drawer 2”
$100
“Drawer 4”
$100
Finally, let’s account for our final result. In “drawer 1” we had $300 on the left side
counted as positive (remember?), and on the right side $300 as negative (remember?); the final
outcome in “drawer 1”? + $300 - $300 = $0. And here is the final outcome in our first class in
Accounting 101:
“Drawer 1”
$300
$300
“Drawer 2”
$100
$0
“Drawer 3”
$100
“Drawer 4”
$100