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The statement of cash flows sums the receipt of and payments of cash during a certain time frame. (Wygandt 5th Edition)
The net income or net loss amount that comes from the bottom of the income statement is used to add or subtract from the retained earnings beginning balance for the time frame being used. The ending balance from the retained earnings is netted with the common stock total on the balance sheet. The cash amount at the top of the balance sheet should match the ending cash balance on the statement of cash flows.
There are basic objectives of financial reporting. The main objective of the financial report is to provide information...
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