FPQP Module 2 Questions with Correct Answers 100% Verified By Experts| Latest Update
Guaranteed Success
Statement of Financial Position Considers assets and liabilities on a given date and can
determine current net worth.
Net worth equation Assets - Liabilities
Cash Flow Statement Records cash inflows and outflows for a certain period of time
3 Types of Assets 1. Cash/Cash Equivalent
2. Invested Assets
3. Use Assets
Cash/Cash Equivalent Assets resources that can readily be converted to cash with little to no
principal loss
Invested Assets Stocks, bonds, mutual funds, real estate and other similar assets
Use Assets property that's not readily available to meet financial objectives. Includes
someone's residence, automobile, boats and other personal effects.
Fair Market Value (FMV) The price a reasonable, unpressured buyer would pay for property
on the open market.
Liabilities Any debts an individual owes
Footnotes Can explain statement items or reveal undisclosed circumstances
, Where to find information regarding cash and cash equivalents of client Bank records, check
books, money market statements, life insurance policies, tax records
Where to find info regarding investments of client Brokerage statements, mutual fund
statements, retirement account statements, 1099s, K-1s, property documents, or records of
similar sale for real estate in similar areas
Where to find info regarding vested pension benefits of client Pensions admin, HR dept,
annual statements
Where to find info regarding residence(s) of client Mortgage companies, tax bills, real estate
agents, insurance agencies, public records of similar sales
Where to find info about automobiles, boats, etc of client online resources
Where to find info on other use assets of the client Professional appraisers, insurance
agencies, auction houses
Where to find info regarding mortgage of client mortgage companies or lending institutions
3 Types of outflows 1. Savings and Investments
2. Fixed outflows
3. Variable outflows (includes contributions to retirements accounts as well as taxes)
6 items that need evaluation when doing financial analysis - emergency fund
- level of debt
- level of savings
- diversification of assets
- planning for retirement
Guaranteed Success
Statement of Financial Position Considers assets and liabilities on a given date and can
determine current net worth.
Net worth equation Assets - Liabilities
Cash Flow Statement Records cash inflows and outflows for a certain period of time
3 Types of Assets 1. Cash/Cash Equivalent
2. Invested Assets
3. Use Assets
Cash/Cash Equivalent Assets resources that can readily be converted to cash with little to no
principal loss
Invested Assets Stocks, bonds, mutual funds, real estate and other similar assets
Use Assets property that's not readily available to meet financial objectives. Includes
someone's residence, automobile, boats and other personal effects.
Fair Market Value (FMV) The price a reasonable, unpressured buyer would pay for property
on the open market.
Liabilities Any debts an individual owes
Footnotes Can explain statement items or reveal undisclosed circumstances
, Where to find information regarding cash and cash equivalents of client Bank records, check
books, money market statements, life insurance policies, tax records
Where to find info regarding investments of client Brokerage statements, mutual fund
statements, retirement account statements, 1099s, K-1s, property documents, or records of
similar sale for real estate in similar areas
Where to find info regarding vested pension benefits of client Pensions admin, HR dept,
annual statements
Where to find info regarding residence(s) of client Mortgage companies, tax bills, real estate
agents, insurance agencies, public records of similar sales
Where to find info about automobiles, boats, etc of client online resources
Where to find info on other use assets of the client Professional appraisers, insurance
agencies, auction houses
Where to find info regarding mortgage of client mortgage companies or lending institutions
3 Types of outflows 1. Savings and Investments
2. Fixed outflows
3. Variable outflows (includes contributions to retirements accounts as well as taxes)
6 items that need evaluation when doing financial analysis - emergency fund
- level of debt
- level of savings
- diversification of assets
- planning for retirement
