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TrialBalance It is a list of balance extracted from the ledger account. / It shows the balances of all ledger accounts.

It contains the balance of all accounts - real, nominal and personal. It is prepared before the preparation of trading and profit and loss account. / It is prepared after the completion of the ledger accounts or arrival of the balances. It does not contain the value of the closing stock of goods. Its object is to check the arithmetical accuracy. Items shown in the Trial balance are not in order. It has the headings, debit and credit. Expenses due but not paid and incomes due but not received do not appear in the trial balance Balance Sheet It is a statement of assets and liabilities. / It shows the balances of personal and real accounts only. It contains the balance of only those accounts which represents assets and liabilities. It is prepared after the preparation of trading and profit and loss account. It contains the value of closing stock, which appears on the assets side. Its object is to reveal the financial position of the business. But in Balance Sheet, the items shown must be in order. It has the heading of Assets and Liabilities. Expenses due but not paid appear on the liability side and income due but not received appear on the asset side of the balance sheet.

The difference between Trial Balance and Balance Sheet are:


Trial Balance is the 'means' of a accounting process of which Balance sheet is the 'end' because a balance sheet is always prepared from the figures taken out of trial balance. The purpose of preparing a trial balance is to check the arithmetical accuracy of account books; but balance sheet is drafted to reveal the financial position of the business. The two sides of balance sheet are called 'liabilities' and 'assets' sides respectively but in case of trial balance the columns are 'debit' and 'credit' columns. For completing the accounting cycle, the preparation of balance sheet is necessary; but the preparation of trial balance is not always necessary. Trial balance contains in it all the three types of account viz. personal, real and nominal, but balance sheet contains only personal and real accounts. Generally, trial balance does not contain closing stock but balance sheet does.

Differe nce betwe en Trial Balan

ce and Balan ce Sheet:

Trial Balance 1. A Trial Balance is prepared to check the arithmetical accuracy of the books of accounts. A Trial Balance can be prepared frequently. It may be prepared at the end of a month or a quarter. The heading of the two columns are Debit Balances and Credit Balances. All types of accounts find their place in the Trial Balance. 1.

Balance Sheet A Balance Sheet is prepared to know the financial position of the business enterprise on a given date. A Balance Sheet is generally prepared at the end of the accounting period. The headings of the two sides are Liabilities and Assets. 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. In a Balance Sheet, only the closing stock appears on the assets side. In the Balance Sheet, information about net profit earned or net loss incurred is provided. 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.

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Generally, the opening stock appears in the Trial Balance, whereas the closing stock does not. In a Trial Balance, it is not possible to have information about net profit or net loss. A Trial Balance can be prepared without making adjustments regarding prepaid expenses, income received in advance, accrued income, etc.

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