James Hadden is a freshman at Major State University. His earnings from a summer job, combined with a small scholarship and a fixed amount per term from his parents, are his only sources of income. He has a new MasterCard that was issued to him the week he began classes. It is spring term, and Jim finds that his credit card is ‘‘maxed out’’ and that he does not have enough money to carry him to the end of the term. Jim confesses that irresistible opportunities for spring term entertainment have caused him to overspend his resources.
Required:
Describe how accounting information could have helped Jim avoid this difficult situation.