Personsl Financial Stmt

Question 1

In calculating personal f/s, these items will increase or decrease the financial condition?

1. Net earnings
2. Investment increased value
3. Increase in Credit card expense
4. Decrease in mortgage balance

Answer 1

1. Increase value of the financial position, but usually will be included in the ending net worth reported
2. Increase balance
3. Decrease
4. Increase balance

Question 2

What kind of stmts were used for personal financial stmt?

Answer 2

Stmt of financial position (B/S)

Stmt of change in net worth (not required)

Question 3

Where to repeat Income tax on current value assets over asset basis?

Answer 3

Assets
Liabilities
estimated Income taxes
Net worth

Question 4

Report net value of the Personal financial condition on 401k compensation plan

Answer 4

% of employee contribution + earnings on employee’s contribution

Excluding employers’ contribution

Question 5

Amount report for investments on Life insurance

Answer 5

Cash surrender value (current cash value) minus loan amt against the policy

Question 6

For personal financial position report, what accounting basis were used?

Answer 6

Accrual and FV measurement for assets and liabilities

Question 7

What are the two parts of personal estimated income tax include?

Answer 7

Income tax on income and tax amount on excess of assets over liabilities if there was no tax withholding

Question 8

Standard formula of family unit change in net worth

Answer 8

Beginning year balance
+ (-) increase (decrease) in estimate value of assets
+ (-) decrease (increase) in estimated value of liability
= net worth in end of the year

Non-cancelable commitment to pay future sum reported at discounted Amy as liabilities if they are fixed, determinable, not continent and don’t require future service or performance

Question 9

Real estate with mortgage should be reported?

Answer 9

Separate line of Assets value and mortgage amt

Liability in general can be reported at at current value or PV of the future settlement
Income tax payable = estimated tax (income + net worth) - withholding - taxes paid

Income tax provision = (differences between net worth - tax basis o assets and liabilities ) * rate

Question 10

The liability should be listed on financial condition at what order?

Answer 10

In the order of maturity, no matter current or non current

Position List as
Assets
Cash in bank, investment
Total assets

Liability 
CC 
Notes
Home mortgage 
Total liability 
Income tax provision 

Total liabilities and income tax

Net worth

Question 11

How to record personal f/s asset and liability value measured at income tax basis?

Answer 11

Both assets and liabilities all record at ESTIMATED current value