Question

List 4 limitations of Personal Financial Statement(PFC) and give a brief explaination for each of them

List 4 limitations of Personal Financial Statement(PFC) and give a brief explaination for each of them

Homework Answers

Answer #1

Personal Financial Statement: It mainly talks about the current financial position of the person which contains asset and liability data associated with the particular person.

Limitations of personal financial statement are as follows:

1. Dependence on historical data: Data present in the personal financial statement is historical.

2. No account for inflation: Due to no account of inflation data present in personal financial statement underestimate the asset and liabilities.

3. Subject to fraud: Since there is not much auditing done on the data there is chances that some fraud can be done by individual with his financial statement.

4. No predictive value: one can't make any predictive judgement using personal financial statement due to its historical data, one can't judge what will be the future financial status of the person to due uncertainty with the future.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
List the Three Sources of tax law. Provide a brief statement about each.
List the Three Sources of tax law. Provide a brief statement about each.
plz give explaination or example what were the consequence of the great depression on both financial...
plz give explaination or example what were the consequence of the great depression on both financial and legislative?
Give a brief list (4 to 5 aspects) of how an aldol condensation is similar to...
Give a brief list (4 to 5 aspects) of how an aldol condensation is similar to and different than a: Perkin condenation, a Claisen condensation, and the Stobbe condensation.
List the 2 methods of sharpening of an image and include a brief statement for each...
List the 2 methods of sharpening of an image and include a brief statement for each regarding how the process is accomplished. (4 points) Describe the process of histogram creation during image processing. What are the VOI? What is histogram rescaling? (3 points) Why is a high signal-to-noise ratio important for an image? (1 point)
4. Which of the following are limitations of an entity’s Statement of Financial Position? I. The...
4. Which of the following are limitations of an entity’s Statement of Financial Position? I. The Statement of Financial Position prepared at the end of the financial period may not be representative of the financial position at other times during the financial period. II. The Statement of Financial Position may not include all items that create value for the entity. III. The Statement of Financial Position is a historical representation of an entity’s financial position and does not consider the...
What are the limitations of financial ratio analysis? Give examples
What are the limitations of financial ratio analysis? Give examples
State 3 uses and 3 limitations of financial statement ratio analyses. Cite 4 actions the firm...
State 3 uses and 3 limitations of financial statement ratio analyses. Cite 4 actions the firm can take to increase sustainable growth? What does the ‘Internal Growth Rate’ measure?
List 2 areas of the brain that are primarily involved in anxiety disorders. Give a brief...
List 2 areas of the brain that are primarily involved in anxiety disorders. Give a brief description of how each of the two areas are involved in anxiety. Be specific.
List 4 Applications of resistors and describe each of them
List 4 Applications of resistors and describe each of them
Please list each different medical term and then give a brief definitions for each. Patient suffers...
Please list each different medical term and then give a brief definitions for each. Patient suffers from chronic brochitis and diagnosed with congestive heart failure with ischemia in right coronary arteries which has lead to necrosis of the right uppermost part of the atrium. The cardiologist decided on a CABG to reroute the blood in the cardiac muscle. Veins were removed from his legs endoscopically with small ischemic areas to bybass the blockage.