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Considering the Arctic Ocean (including sea ice) as a defined volume, we develop equations describing the time-varying fluxes of mass, heat and freshwater (FW) into, and storage of those quantities within, that volume. The seasonal cycles of fluxes and storage of mass, heat and FW are quantified and illustrated using output from a numerical model. The meanings of 'reference values' and FW fluxes are discussed, and the potential for error through the use of arbitrary reference values is examined. [ABSTRACT FROM AUTHOR]