Home » Explanations » Final Accounts » Difference between Trial balance and balance Sheet
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Difference between Trial balance and balance Sheet
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The following are the main points of difference between Trial Balance and Balance Sheet.
Trial balance
|
Balance Sheet
|
| It is prepared to check the arithmetical accuracy of the ledger accounts. |
It is prepared to show the financial position of the business on a particular date. |
| It includes the balances of all the accounts appearing in the ledger. |
In Balance Sheet, only assets, liabilities and capital account balances are included. |
| It is prepared before the preparation of the Trading and Profit and Loss Account. |
It is prepared after the preparation of the Trading and Profit & Loss Account. |
| It does not generally show the adjusting entries. |
It shows the effect of adjusting entries. |
| Its preparation is not very essential. It may not be prepared when the accountant is satisfied regarding the arithmetical accuracy of his accounts. |
Its preparation is necessary in order to show the financial position of the business. |
| It is prepared in a form which is similar to Journal. |
It is prepared in a form which is more or less similar to the ledger. |
| A Trial Balance may be prepared monthly. |
A Balance Sheet is prepared yearly, or half yearly. |
| It does not contain the value of the closing stock of goods. |
It contains the value of the closing stock which
appears on the asset side. |
| It does not tell the profit earned or loss sustained during a particular period. |
It gives a clear idea of the profit earned or loss sustained during any period. |
