ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A personal balance sheet shows how financially healthy a person is by providing a current overview of the individual’s financial situation. It lists all personal assets, anything owned that has financial value, and all personal liabilities, debts owed to financial institutions.

Detailed explanation-2: -Understanding the Personal Financial Statement A personal financial statement shows the individual’s net worth-their assets minus their liabilities-which reflects what that person has in cash if they sell all their assets and pay off all their debts.

Detailed explanation-3: -The balance sheet includes information about a company’s assets and liabilities. Depending on the company, this might include short-term assets, such as cash and accounts receivable, or long-term assets such as property, plant, and equipment (PP&E).

Detailed explanation-4: -Essentially, your assets are everything you own, and your liabilities are everything you owe. A positive net worth indicates that your assets are greater in value than your liabilities; a negative net worth signifies that your liabilities exceed your assets (in other words, you are in debt).

Detailed explanation-5: -Comparative balance sheets. Vertical balance sheets. Horizontal balance sheets.