PERSONAL FINANCE 8: THE WORKINGS & USES OF A PERSONAL INCOME STATEMENT WITH NO EARNING ASSETS

There will be less items in a Personal Income Statement with no physical or Financial Earning Assets. The only source of Revenues will be Salaries and / or Professional Fees.

Direct Costs will be the expenses incurred in earning the Salaries and / or Professional Fees; i.e., Transport to / from Work, Meals at Work.

Expenses will include Rent since the Balance Sheet shows no House & Lot owned.

By netting out the costs incurred in earning the Salaries, it becomes clear whether enough Revenues are earned to cover Personal Overhead or Expenses.

Liabilities will be the unpaid Direct Costs and Expenses.

Personal Net Income will be the amount left after Direct Costs and Expenses are deducted. If the Personal Net Income is positive, Equity in the Balance Sheet will increase.