AAMS 1 - The Asset Management Process Exam Study Guide with Complete Solutions

AAMS 1 - The Asset Management Process Exam Study Guide with Complete Solutions Assets - Answer️️ -Assets are the things the client owns - even if they are not fully paid for. Liabilities - Answer️️ -Liabilities are what the client owes - on credit cards, bank loans, mortgages, etc. Net Worth formula - Answer️️ -Net Worth is a residual figure determined by: Assets - Liabilities = Net Worth Describe "Use Assets" - Answer️️ -Assets used in the course of daily living: automobiles, homes, boats, personal property, etc Another name for: Statement of Financial Position - Answer️️ -Balance Sheet - details a specific date Another name for: Income Statement - Answer️️ -Cash Flow Statement - details a period of time, typically a year Income / Cash Flow Statement - Answer️️ -Lists sources of income and expenses that covers a specific period of time, typically a year. Formula for an Income / Cash Flow Statement - Answer️️ -Gross Income - Expenses = Surplus (Deficit) ©SOPHIABENNETT@ Monday, August 19, 2024 12:35 AM Page 2 of 3 Difference between Income Statement & Cash Flow Statement - Answer️️ -Income Statement - any surplus represents the amount available for savings or investment. Describe "Income Surplus" - Answer️️ -The two periods when income exceeds expenses - the "early working years" (before children) and the "late working years" (after children are through college and out of the house) Describe "Income Deficit" - Answer️️ -The period when