Difference between a Trial Balance and Balance sheet
A Trial Balance can be distinguished from the Balance Sheet as under:
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Basis of distinction
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Trial Balance
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Balance Sheet
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It is prepared to check the arithmetical accuracy of the posting of transactions in to ledger.
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It is prepared to know the financial position of an enterprise at a particular date.
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All the ledger balances are shown in Trial Balance.
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Only real and personal account balances are shown in balance sheet.
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Heading of two columns are ‘debit balances’ and ‘ credit balances’ (in case of Trial Balance by Balance Method)
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The heading of the two sides are ‘assets‘ and ‘liabilities’.
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Generally, closing stock does not appear in the Trial Balance whereas opening stock appears
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In a Balance Sheet, only closing stock appears on the Assets side as current assets.
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Information about net profit or loss is not provided in Trial Balance.
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Information about net profit/loss is provided
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It can be prepared periodically, for example, at the end of a month/quarter/ half year.
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It is generally prepared at the end of an accounting period.
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It can be prepared without incorporating adjustment
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It cannot be prepared without incorporating the items of adjustment.
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Its preparation can be dispensed with.
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Its preparation cannot be dispensed with.
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