ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -You can create your own personal financial statements to help with budget planning and to set goals for increasing your net worth. The two types of personal financial statements are the personal cash flow statement and the personal balance sheet.

Detailed explanation-2: -Another name for a budget is a cash flow plan. A zero-based budget is only used for people who have zero debt. It usually takes three months for your budget to begin working well.

Detailed explanation-3: -The receipt of dividends from long-term investments in stock is classified as a cash inflow from investing activities. Any item that appears on the income statement would be considered as either a cash inflow or cash outflow from operating activities.

Detailed explanation-4: -A personal cash flow statement is usually the starting point for an individual’s or family’s budget. Some people with large incomes spend their entire paychecks within a few days, while others with small incomes may be big savers. Stocks are considered liquid assets since they are easy to sell without a loss in value.