Under which type of accounting would a family most likely record and analyze their application for a mortgage?

• A. Cost accounting
• B. Government accounting
• C. Management accounting
• D. Personal accounting

Answer: (D)

Verified step by step guidance

1. Understand the context of the question: The problem is asking about the type of accounting that a family would use to record and analyze their application for a mortgage. This involves personal financial matters rather than business or organizational accounting.
2. Review the definitions of the accounting types provided: Cost accounting focuses on tracking and managing costs within a business. Government accounting deals with the financial management of public funds. Management accounting is used by businesses to make internal decisions. Personal accounting, on the other hand, involves managing an individual's or family's financial activities.
3. Identify the key characteristics of personal accounting: Personal accounting includes activities such as budgeting, tracking income and expenses, managing debts, and planning for financial goals. Applying for a mortgage falls under this category because it involves personal financial planning and debt management.
4. Eliminate the incorrect options: Since the question pertains to a family's financial activities, cost accounting, government accounting, and management accounting are not relevant. These are used in business or public sector contexts, not for personal financial matters.
5. Conclude that the correct type of accounting for this scenario is personal accounting, as it directly relates to managing and analyzing individual or family finances, including mortgage applications.