Introduction to Personal Financial Statements

Question 1

Identify the statements included in a set of personal financial statements.

Answer 1

A set of personal financial statements would include:
1. A statement of financial condition (balance sheet);

2. A statement of changes in net worth.

Question 2

Identify the “entities” for whom personal financial statements are prepared.

Answer 2

Personal financial statements are prepared for:
1. An individual;

2. A husband and wife;
3. A family unit

Question 3

What accounting concepts underlie the preparation of personal financial statements?

Answer 3

Personal financial statements are prepared based on the use of accrual accounting and fair value measurement.