What is the difference between a trial balance and a balance sheet?
What is the difference between a trial balance and a balance sheet?
| Trial Balance | Balance Sheet | |||
| 1. | A Trial Balance is prepared to check the arithmetical accuracy of the books of accounts. | 1. | A Balance Sheet is prepared to know the financial position of the business enterprise on a given date. | |
| 2. | A Trial Balance can be prepared frequently. It may be prepared at the end of a month or a quarter. | 2. | A Balance Sheet is generally prepared at the end of the accounting period. | |
| 3. | The heading of the two columns are “Debit Balances” and “Credit Balances”. | 3. | The headings of the two sides are “Liabilities” and “Assets”. | |
| 4. | All types of accounts find their place in the Trial Balance. | 4. | In a Balance Sheet, accounts of assets, liabilities, capital and those accounts which are remained open after the preparation of Trading and Profit and Loss account. | |
| 5. | Generally, the opening stock appears in the Trial Balance, whereas the closing stock does not. | 5. | In a Balance Sheet, only the closing stock appears on the assets side. | |
| 6. | In a Trial Balance, it is not possible to have information about net profit or net loss. | 6. | In the Balance Sheet, information about net profit earned or net loss incurred is provided. | |
| 7. | A Trial Balance can be prepared without making adjustments regarding prepaid expenses, income received in advance, accrued income, etc. | 7. | A Balance Sheet can not be prepared without making adjustments regarding prepaid expenses, outstanding expenses, income received in advance or accrued income, making provisions for possible losses, etc. | |
