# Balance sheet on T2 question **URL:** \ **Category:** Tax Topics\ **Created:** [May 13, 2024, 6:04pm UTC](https://www.protaxcommunity.com/t/balance-sheet-on-t2-question/8629 "2024-05-13T18:04:15Z")\ **Posts on this page:** 9\ **Page:** 1
**Author:** ![milo](https://avatars.discourse-cdn.com/v4/letter/m/85e7bf/32.png) [@milo](https://www.protaxcommunity.com/u/milo)\ **Post date:** [May 13, 2024, 6:04pm UTC](https://www.protaxcommunity.com/t/balance-sheet-on-t2-question/8629/1 "2024-05-13T18:04:15Z")
Hi everyone, I have a corporate tax client that does his own bookkeeping and provided a profit and loss and last year’s T2. However, using his profit and loss and confirm all the asset, liability, and carry over last year’s retained earnings on the balance sheet, the balance sheet does not balance. Should the difference goes into due to/from shareholder account? What are the common practice in this if the client does his own bookkeeping? Many thanks. ---
**Author:** ![laurie](https://avatars.discourse-cdn.com/v4/letter/l/13edae/32.png) [@laurie](https://www.protaxcommunity.com/u/laurie)\ **Post date:** [May 13, 2024, 6:22pm UTC](https://www.protaxcommunity.com/t/balance-sheet-on-t2-question/8629/2 "2024-05-13T18:22:41Z")
I send it back to them and tell them to make it balance. If I am really nice and and have an electronic copy of the data file I will figure out which transactions are out of balance and fix it properly. ---
**Author:** ![cmjuneja.fca](https://avatars.discourse-cdn.com/v4/letter/c/ecc23a/32.png) [@cmjuneja.fca](https://www.protaxcommunity.com/u/cmjuneja.fca)\ **Post date:** [May 13, 2024, 6:23pm UTC](https://www.protaxcommunity.com/t/balance-sheet-on-t2-question/8629/3 "2024-05-13T18:23:16Z")
if its a small number put to prior period adjustments to RE else go with SHL ---
**Author:** ![dominique\_dabolczi](https://avatars.discourse-cdn.com/v4/letter/d/7ab992/32.png) [@dominique\_dabolczi](https://www.protaxcommunity.com/u/dominique_dabolczi)\ **Post date:** [May 13, 2024, 7:03pm UTC](https://www.protaxcommunity.com/t/balance-sheet-on-t2-question/8629/4 "2024-05-13T19:03:25Z")
> [@milo](#): > > Hi everyone, I have a corporate tax client that does his own bookkeeping and provided a profit and loss and last year’s T2. However, using his profit and loss and confirm all the asset, liability, and carry over last year’s retained earnings on the balance sheet, the balance sheet does not balance. Should the difference goes into due to/from shareholder account? What are the common practice in this if the client does his own bookkeeping? Many thanks. @milo I send a letter… A - Thank you for returning B - Indicating the his balance Sheet is out of balance Showing the following: 1 - **#Prior 2Year YE Balance Sheet** per the prior year T2. 2 - **#Current YE Balance Sheet** per client 3 - **#out of balance amount** C - Providing three options 1 - Client providing updated financial statements with YE balance sheet in balance. 2 - Your service and fees to review and fix the financial statements 3 - Consultation fee to support the client in fixing… This is really your choice about how you wish to interact with your clients and be seen as a valuable resource while maintaining your profit levels. ---
**Author:** ![kevin](https://avatars.discourse-cdn.com/v4/letter/k/2acd7d/32.png) [@kevin](https://www.protaxcommunity.com/u/kevin)\ **Post date:** [May 13, 2024, 7:17pm UTC](https://www.protaxcommunity.com/t/balance-sheet-on-t2-question/8629/5 "2024-05-13T19:17:17Z")
It depends on whether you normally do entries on their books. If not (as is the case with many of these DIY clients), I’d see if it’s an easy difference (maybe last year’s tax provision?). Otherwise, I’d go with @laurie’s suggestion of asking the client to make it balance. I have a couple clients like this. The cost of them saving money on their professional fees is to give you numbers you can use. ---
**Author:** ![milo](https://avatars.discourse-cdn.com/v4/letter/m/85e7bf/32.png) [@milo](https://www.protaxcommunity.com/u/milo)\ **Post date:** [May 13, 2024, 7:31pm UTC](https://www.protaxcommunity.com/t/balance-sheet-on-t2-question/8629/6 "2024-05-13T19:31:49Z")
Thanks everyone! Appreciated the quick and very helpful response! ---
**Author:** ![Nezzer](https://sea2.discourse-cdn.com/flex016/user_avatar/www.protaxcommunity.com/nezzer/32/3845_2.png) [@Nezzer](https://www.protaxcommunity.com/u/Nezzer)\ **Post date:** [May 13, 2024, 8:49pm UTC](https://www.protaxcommunity.com/t/balance-sheet-on-t2-question/8629/7 "2024-05-13T20:49:38Z")
> [@milo](#): > > What are the common practice in this if the client does his own bookkeeping? I would hope that “common practice” is to do a full year-end work-up, in Caseware or similar software, with links to the relevant supporting documents - particularly all balance sheet accounts. This includes some high-level analyses of the balances and creation of adjusting entries, as needed. Caseware or similar software includes tools to review the financials and help you correct errors - so you should never have anything unbalanced in the trial balance prior to T2 prep. If you still have a warning on the S100 (after importing or entering the GIFI balances in TaxCycle), it is usually just a dollar or two due to rounding. Then, common practice is to adjust accounts payable or accrued liabilities or some other current liability. If none exist, the next best option is to consider a current asset, then a long-term liability, then a long-term asset. ---
**Author:** ![milo](https://avatars.discourse-cdn.com/v4/letter/m/85e7bf/32.png) [@milo](https://www.protaxcommunity.com/u/milo)\ **Post date:** [May 13, 2024, 9:36pm UTC](https://www.protaxcommunity.com/t/balance-sheet-on-t2-question/8629/9 "2024-05-13T21:36:33Z")
Thanks for the template! This is what I will do. ☺ ---
**Author:** ![jhd.hemeon](https://avatars.discourse-cdn.com/v4/letter/j/3ec8ea/32.png) [@jhd.hemeon](https://www.protaxcommunity.com/u/jhd.hemeon)\ **Post date:** [May 13, 2024, 10:40pm UTC](https://www.protaxcommunity.com/t/balance-sheet-on-t2-question/8629/10 "2024-05-13T22:40:40Z")
Sounds like a client no one wants. Send it back with a note to provide a balance sheet that (1) is balanced, and (2) is plausible in comparison to the prior year’s GIFI.