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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Describe the relationship between changes in cash and changes in noncash assets, liabilities, and stockholders’ equity.

To determine

Introduction:

Cash flow statements are the statements that determines the inflow and outflow of cash from three major activities that are carried out in a business i.e. operating activities, investing activities and financing activities.

To describe:

The relationship between changes in cash and changes in non-cash asset, liabilities and equity.

Explanation

There is a time lapse between recognition of revenue and expenses and the inflows and outflow of cash so by looking at the balances of asset and liabilities in the balance sheet we can acquire the information about cash flows. Changes in the value of asset, liabilities and stockholders’ equity helps in determining the ch...

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