This explorer shows the same dated transactions as cash and as profit, side by side. It helps Accounting and Business students who mix up money received with revenue earned, or who want to check a cash and profit question.
Free tool · Principles of Accounting
Cash profit and transaction-timing explorer
You cannot see why a business with a profit can still run short of cash.
Everything you enter stays on this device.
How do I use it?
- Set the opening cash and the start and end dates of the period.
- Add each transaction with a description, date, type and amount, or edit the example.
- Read the dated timeline, then the two totals: closing cash and profit.
- Check the reconciliation table to see which transactions explain the gap.
How does it work?
Each transaction type has a fixed effect on cash and on profit. A credit sale adds to profit but not to cash, and a collection from an earlier sale adds to cash but not to profit.
Profit is the sum of the profit effects, and the net cash movement is the sum of the cash effects. Closing cash is the opening cash plus that movement.
The reconciliation starts from profit and adds the gap for each type, for example minus the credit sales not yet collected. It ends at the net movement in cash, so you can see the exact bridge.
A short worked example
Start with RM500 of cash. The business makes a credit sale of RM300 that is not yet collected, and pays RM100 of expenses in cash.
Profit is RM300 minus RM100, which is RM200. Cash is RM500 minus RM100, which is RM400. The reconciliation starts at RM200 of profit and subtracts the RM300 receivable, giving a cash movement of -RM100.
Next, add RM300 collected later in the same period. Cash rises to RM700, while profit stays at RM200 because the revenue was already counted.
What are its limits?
This is a fictional classroom model with simplified rules. Each amount can be up to RM1 000 000 000. Transactions dated outside the period are left out of the totals and flagged. It is a learning aid for classroom cases and stays separate from any real accounting system.
Where does it connect to the lessons?
Begin with separating cash, profit and capital and recording transactions in a cash book. Business students can continue with interpreting cash flow forecasts, and the sole trader lessons on preparing a profit and loss statement use the same profit idea.
If the cash and profit difference is where marks slip, SPM Accounting tuition gives you a teacher to practise with. The one-hour trial class (from RM50) is the first step.
Common questions
Why can profit be higher than cash?
Profit counts revenue when it is earned and expenses when they are incurred. Cash counts only money moving. A credit sale raises profit now, but the cash arrives later, so closing cash can be lower than profit suggests.
Are drawings an expense?
No. Drawings are cash the owner takes out for personal use. They reduce cash but not profit. The tool shows this as a cash change with no profit change.
Is depreciation a cash expense?
No. Depreciation spreads the cost of equipment over its life and reduces profit, but no cash moves in the period. Buying the equipment with cash is a separate transaction.
Can this calculate the tuition fee?
No. It is a fictional classroom model with simplified rules. It works with imaginary transactions and is a learning aid only, so fees are a separate matter, agreed with the teacher before the trial.
A teacher can work through your own cash and profit examples in a one-to-one lesson and practise classifying each transaction until the difference is clear to you.
- Online one-to-one lessons for your child with an experienced teacher.
- Your first class is a one-hour trial, from RM50. The fee is agreed before you book.
- Happy with the teacher? Continue with lessons of about 1.5 hours. If not, ask for another teacher.