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Personal Budget, Balance Sheet, and Cash Flow Statement - Essay Example
Finance & Accounting
Pages 4 (1004 words)
Name: Institution: Abstract A personal budget is mainly a spending plan of an individual. The personal budget identifies the sources of finance and how the finances will be allocated to different expenditure during a specific period of time. Some items included in a personal budget are rental expenditure, groceries, debt repayments and entertainment expenditure…
The assets should be equivalent to the liabilities of the individual. Some examples of assets that are included in the balance sheet include the real estate, the checking accounts, savings accounts, cash value of life insurance, vehicles, money market investments and jewelry. Liabilities represent the obligations of the individual such as consumer debts, student loan debts, car loans and outstanding mortgage repayments. Personal cash flow statement will measure the individual cash inflows and outflows in order to determine the net cash flow for a specific period of time. Personal cash inflow will mainly include the salaries and wages, the interests from savings, the dividends received from invested funds and the capital gains that may be realized from the sale of bonds or common stocks. The expense or cash outflows will include the rent paid like house rent, car rental fees, mortgage repayments, utility bills, the entertainment expenditure, and groceries utilized by the individual for the specific period of time. Introduction Below are the personal budget, cash flow statement and balance sheet of Sophia. In order to prepare the above financial statements, it is important that we understand the client age, the spouses, and dependants of the client. ...
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