Difference between Trial balance and balance Sheet
The following are the main points of difference between Trial Balance and 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.|