How to Do T-Balances in Accounting
A T-balance, also known as a trial balance, is calculated by recording total income for the year and all of the individual expenses. Subtract the expenses from the total income to get the trial balance with help from an enrolled agent in this free video on filing taxes.
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My name is Penny Tokash; I'm an Enrolled Agent in Jonesboro, Georgia. My company is Tax Facts Incorporated. I'd like to speak you, to you now about how you do a trial balance. You need to do a trial balance of your, your income and your expenses of your company before you do your tax return. Everything on the tax return comes from the trial balance. Most people keep their trial balance now through a software; but you need to know how you can do that in black and white on paper. You want to list first of all the income and you can add up all the income of each month so that you've got the income that you did for the whole year totaled. Then you're going to go through your expenses and all of your expenses are listed according to categories. So you've got some auto; you've got accounting; you've got office expenses, you know, paper, pencils, that sort of thing. You've got other kins of supplies. Let's say that you're a, of service; you still have supplies; paper cups, plates, paper towels for the office. So those are going to be the kind of supplies that you have. All of these expenses; you're going to go ahead and list them for the whole year individually. Once you've done that, total up all of your expenses. Your trial balance is your income less your expenses and this should be your profit.