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The statement of cash flows prepared using the indirect method adjusts net income for the changes in balance sheet accounts to calculate the cash from operating activities. In other words, changes in asset and liability accounts that affect cash balances throughout the year are added to or subtracted from net income at the end of the period to ...

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The balance sheet accounts comprise assets, liabilities, and shareholders equity Stockholders Equity Stockholders Equity (also known as Shareholders Equity) is an account on a company's balance sheet that consists of share capital plus, and the accounts are broken down further into various subcategories. The accounts in the income statement ...
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