What is a key component of a personal financial statement?

A key component of a personal financial statement is the income and expenses over a period. Personal financial statements are designed to provide a clear picture of an individual’s financial situation. By detailing income, which includes all sources of earnings, and expenses, which encompass all types of spending, this information allows individuals to evaluate their financial health.

Incorporating income and expenses provides insight into cash flow, helping individuals understand how well they are managing their finances. This aspect is essential for budgeting, planning for future financial goals, and assessing one's ability to meet obligations. By tracking these figures, individuals can make informed decisions about saving, investing, and spending, laying the groundwork for effective financial planning.

Other options, such as only current bank balances, do not provide the comprehensive view needed for financial assessment, while a listing of all social media accounts is irrelevant to personal finance. Details of investments in global markets, while valuable, represent only a part of an individual's overall financial landscape rather than the complete picture that income and expenses provide.