Personal Finance 1st Edition by Jack R. Kapoor

Exercise 8

Creating Personal Financial Statements. Using Sheets 15 and 16 in the Personal Financial Planner, or some other format, prepare a personal balance sheet and cash flow statement. (Obj. 3)

Step 1 of 2

Balance sheet:

A balance sheet or net worth statement is a financial statement that reports what an individual owns and owes. Steps involved are

• Prepare a total of all assets

• Prepare a list of liabilities

• Subtract total liabilities from total assets to determine net worth. This indicates current financial position of an individual

Example:

Balance sheet

Assets
Savings account balance
Household possessions
Home computer
Value of investment
Total Assets
Liabilities
Balance of educational loan
Credit card balance
Total Liabilities
Net worth