Difference Between Trial Balance and Balance Sheet

True Tamplin

Written by True Tamplin, BSc, CEPF®
Updated on September 8, 2021

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.
True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True contributes to his own finance dictionary, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, his interview on CBS, or check out his speaker profile on the CFA Institute website.

Leave a Comment