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Chapter 17

Preparation of the statement of cash

flows

3.1 Cash flows from operating activities

Cash flows may include:

 Cash generated from operations (either direct or indirect method as above)

 interest paid

 income taxes paid

The cash flow should be calculated by reference to the charge to profits for the item
(shown in the statement of profit or loss) and any opening or closing payable balance
(shown on the statement of financial position). A T-account approach or a list
approach can be used to help with calculations.

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