The following table summarizes the main differences between the trial balance and balance sheet.
Trial Balance |
Balance Sheet |
| Prepared to check the arithmetical accuracy of the ledger accounts | Prepared to show the financial position of the business on a particular date |
| Includes the balances of all the accounts in the ledger | Includes only the assets, liabilities, and capital account balances |
| Prepared before the trading and profit and loss account | Prepared after the trading and profit and loss account |
| Does not generally show adjusting entries | Shows the effect of adjusting entries |
| Preparation is not essential (e.g., it may not be prepared if the accountant is satisfied with the arithmetical accuracy of the accounts) | Preparation is needed to show the financial position of the business |
| Prepared in a form that is similar to the journal | Prepared in a form that is more or less the same as the ledger |
| Typically prepared monthly | Typically prepared yearly or half-yearly |
| Does not contain the value of the closing stock of goods | Contains the value of the closing stock, which appears on the asset side |
| Does not show profit or loss for a period | Gives a clear idea of profit or loss for any given period |