Cash flows from operating activities, as part of the statement of cash flows, include cash flow from transactions that enter into the determination of net income.

Question

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Cash flows from operating activities include transactions that impact net income, such as sales of goods or services, receipt of cash from customers, payments to suppliers, and employee salaries and wages. It is important to note that not all transactions that impact net income are included in operating activities. Some non-operating items, such as gains or losses from the sale of long-term assets, may be reported separately in the statement of cash flows.

Cash Flows from Operating Activities, as Part of the Statement