A trial balance is a report listing the ending balance of every account in the general ledger, used to check that total debits equal total credits before preparing statements.
At the end of a period, the balance of every ledger account is listed in a trial balance with debits in one column and credits in another. Because of double-entry, the two columns should be equal. If they are not, an error has been made in recording or posting, so the trial balance is a first-line accuracy check.
A balanced trial balance is the starting point for producing the financial statements: the account balances are grouped and mapped into the balance sheet and income statement. Note that a trial balance can balance yet still hide errors, such as a transaction posted to the wrong account.
Before year-end statements are prepared, the accountant runs a trial balance. Total debits of $250,000 equal total credits of $250,000, confirming the ledger is internally balanced and ready to roll into the financial statements.
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Multiply the pre-tax price by the combined rate for the province where the supply is made, then add that amount to the price. If the price already includes tax, divide the total by one plus the rate to get the pre-tax amount, and the difference is the tax. The rate depends on the province of supply rather than where your business sits, so verify the current rate for that province and confirm the item is not zero-rated or exempt.
Most municipalities do not take credit cards for property tax directly. They accept pre-authorised debit, online or telephone banking, cheque, and in-person payment. Third-party payment processors will charge a property tax bill to a card for a service fee, which normally costs more than the rewards earned. The CRA works the same way for income tax and GST/HST: no direct card payment, but authorised third-party providers accept cards for a fee.
Net income is the line on the T1 reached after total income is reduced by deductions such as RRSP contributions, union dues, child care costs and support payments. It is not take-home pay, and not the same as taxable income, which subtracts a further set of amounts. Net income matters because benefits and credits are tested against it, so a deduction that lowers it can increase the Canada child benefit, the GST/HST credit and other income-tested amounts.
Taxable income is what remains after deductions. A personal return moves through stages: total income from all sources, then net income after deductions such as registered retirement savings plan contributions, child care costs and union dues, then taxable income after any further deductions. Tax is calculated on that taxable income using the federal and provincial brackets, and non-refundable credits are applied afterwards, which is why a credit and a deduction are not worth the same amount.
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Reviewed and fact-checked by Udit Gupta
Ex Big 4 — Ernst & Young, Deloitte · International & cross-border tax specialist · CPA Canada (In-Depth Tax Program) · Chartered accountant, ICAI & MIA
Udit Gupta has over 15 years of experience helping corporations and business owners with corporate structuring, corporate tax filing, bookkeeping, payroll, GST/HST, cross-border tax and CRA representation. Big 4 trained at Ernst & Young and Deloitte, and qualified as a chartered accountant in India and again in Malaysia, he founded his accounting practice in 2014 to serve entrepreneurs, startups and non-resident business owners across Canada. View full member bio.
The Institute of Chartered Accountants of India — member 521458 · Malaysian Institute of Accountants — member CA 44667 · Ex Big 4: Ernst & Young, Deloitte · CPA Canada (In-Depth Tax Program), completed 19 Dec 2023 · In-Depth GST/HST Part I, 12 Jul 2022 · Part II, 5 Jul 2023
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