Question 2,8,17

Chapter 4: Personal Financial Statements (Preparation and Analysis) 15 SCUSSION QUESTIONS 1. What is the relationship between GAAP/FASB and personal financial statements? 2. Describe some of the uses of personal financial statements 3. What is the purpose of the statement of financial position? 4. What items are included on the statement of financial position? 5. Discuss the presentation of the statement of financial position (.e., how items are listed and why). 6. What is the purpose of the personal statement of cash flows? 7. What items are included on the personal statement of cash flows? 8. Discuss the presentation of the personal statement of cash flows (i.e., how items are listed and why). 9. What is the purpose of the statement of changes in net worth? 10. What items are included on the statement of changes in net worth? 11. Discuss the presentation of the statement of changes in net worth (i.e., how items are listed and why). 12. What are the differences between long-term and current assets/liabilities? 13. Why are financial ratios important to financial planning? 14. What is the importance of keeping accurate and up-to-date financial statements? 15. What is fair market value? 16. What is liquidity? 17. Why do we prepare three different financial statements? 18. Discuss the importance of vertical analysis. 19. What are some of the limitations of personal financial statements? 20. What is the purpose of budgeting 21. List the different types of home mortgages and their characteristics