BADM*4070 DE Chapter Notes - Chapter 4: Current Liability, Income Statement, Human Capital
Document Summary
Chapter 4 - measuring & controlling personal finances. The only reason you prepare personal nancial statements is to manage the families. No one outside your family will use them, except to help with your planning. Articulation: means that all income statement items link up to items on the balance sheet. A family is a group of individuals who share their wealth, revenues, and expenses. Some members may have resources that they don"t share, but the primary resources that are needed to live are shared. We include all assets, but to avoid long lists of assets, we categorize the assets we"ve got. The most valuable assets are important, and this includes ones that you can control or plan in the future. There are 3 di erent types of assets: personal use assets: assets you use in everyday life. They don"t yield income, but they provide consumption: luxury assets: for personal use, but very marginal to the families needs.
