Personal Financial Statements Flashcards

1
Q

What are and aren’t appropriate financial statements for personal financial statements?

A

Are: Statement of Financial Condition & Statement of Changes in Net Worth
Aren’t: Income Statement & Statement of Cash Flows

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2
Q

How is personal Statement of Financial Condition reported? How are income taxes calculated here?

A
  • On accrual basis using fair value

- As if assets had been realized and liabilities had been liquidated

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3
Q

How should significant interests in separate business be shown? Non-separate businesses?

A
  • As a single line item and amount for each business interest
  • As separate assets and liabilities that comprise business activity
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4
Q

Do we include income as an increase in Statement of Net Worth?

A

-No unless it results in an increase in assets

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