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GAAP requires the statement of cash flows be presented when financial statements are prepared.

(a) describe the purpose of the statement of cash flows.

(b) List and describe the three categories of activities that must be reported in the statement of cash flows.

(c) Identify and describe the two methods that are allowed for reporting cash flows from operations.

(d) Describe the financial statement presentation of noncash investing and financing transactions. Include in your description an ex of a noncash investing and financing transaction.

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