Hover or select a transaction on the left to see which statement(s) it affects and why.
How transactions flow into the income statement, balance sheet, and cash flow statement
This website provides simplied transactions for some imaginary firms. Choose one and then go over these transactions.
Jill's Coffee Shop — first month of operation. Click each transaction below to see where it lands on the three statements. Hover to read why. Click again to toggle it off. Try them one at a time, then press "Post all" to see the finished statements.
Transactions
Where it goes
Hover or select a transaction on the left to see which statement(s) it affects and why.
For the period: Month 1
| Revenue | $0 |
| Cost of goods sold (COGS) | $0 |
| Gross profit | $0 |
| Rent | $0 |
| Wages | $0 |
| Depreciation | $0 |
| Operating income (EBIT) | $0 |
| Interest expense | $0 |
| Pre-tax income (EBT) | $0 |
| Income tax | $0 |
| Net income | $0 |
Gross profit = Revenue − COGS (what's left after making the product). EBIT (Earnings Before Interest and Taxes, also called operating income) = Gross profit − operating expenses. EBT (Earnings Before Taxes) = EBIT − interest. Net income = EBT − taxes — what actually flows to the owner.