Answer the following multiple-choice questions related to personal financial statements:
Required
a. For the personal financial statement, statement of changes in net worth, which of the following would be a realized increase in net worth?
1. Dividend income
2. Change in value of land
3. Decrease in value of house
4. Personal expenditures
5. None of the above
b. For the personal financial statement, statement of changes in net worth, which of the following would be an unrealized increase in net worth?
1. Increase in value of land
2. Decrease in value of furnishings
3. Personal expenditures
4. Salary
5. None of the above
c. Which of the following is not a suggestion for reviewing the statement of financial condition?
1. Review realized decreases in net worth.
2. Review the net worth amount.
3. Determine the amount of the assets that you consider to be very liquid.
4. Observe the due period of the liabilities.
5. Compare specific assets with any related liabilities.
d. Which of the following would be a source of information for personal financial statements?
1. Bank statements
2. Checkbooks
3. Real estate tax returns
4. Insurance policies
5. All of the above
e. Which of the following would not be an acceptable presentation on the statement of financial condition?
1. A car may be presented at cost.
2. Payables and other liabilities are presented at the discounted amounts of cash to be paid.
3. Investments in real estate should be presented at their estimated current values.
4. The liability for income taxes payable should include unpaid income taxes for completed tax years and an estimated amount for income taxes accrued for the elapsed portion of the current tax year to the date of the financial statements.
5. All of the above