A Net Income Trial Balance is an accounting calculation that reflects the difference between the total revenues and total expenses of a company over a specific period, typically a month or a quarter. It serves as a starting point for the preparation of the income statement and provides a snapshot of a company’s financial performance.
Calculating the Net Income Trial Balance involves summarizing the balances of all revenue and expense accounts into a trial balance format. The revenue accounts represent income earned, while the expense accounts represent costs incurred. The difference between the total revenues and total expenses is the net income, which is the company’s profit or loss for the period.