NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Evaluating the Financial Position of Clients
Which of the following is treated as a liability item when preparing a client's balance sheet?
An outstanding credit card balance is a liability because it is money the client owes to the card issuer. Provident fund balances, mutual fund units and policy surrender values are assets that the client owns.
- AOutstanding credit card balanceCorrect
- BEmployee provident fund balance
- CMarket value of mutual fund units
- DSurrender value of an endowment policy
Explanation
Amounts owed to others, such as an unpaid credit card balance, are liabilities. The other three are assets owned by the client.
Did you get it right without looking?
One question tells you little. A timed set on Evaluating the Financial Position of Clients shows your real accuracy, how long you take and where you lose marks.
More Evaluating the Financial Position of Clients questions
- Meera has assets of Rs 80 lakh (including a home worth Rs 50 lakh) and liabilities of Rs 20 lakh. Her liquid assets are Rs 6 lakh and her mo…
- In personal financial planning, which ratio is computed by dividing a client's liquid assets by monthly non-discretionary cash outflows, and…
- Ms. Neha Kulkarni has total assets of Rs 1,20,00,000, of which Rs 70,00,000 is her residence and Rs 20,00,000 is financial assets. Her total…
- In the personal financial statements of a client, which of the following is correctly classified as a liquid asset?
- Meena Iyer has total assets of Rs 80 lakh, of which Rs 50 lakh is her house, and total liabilities of Rs 20 lakh. Her financial assets are R…
- In personal financial statement analysis, the ratio of liquid assets to monthly non-discretionary cash expenses is used to assess which aspe…