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Difference Between Trial Balance and Balance Sheet:

Learning Objectives:

  1. Differentiate between trial balance and balance sheet.


Following are the main points of difference between trial balance and balance sheet:

Trial Balance

Balance Sheet

1 It is prepared to verify the arithmetical accuracy of books of accounts 1 It is prepared to disclose the true financial position of the business
2 It is prepared with balances of all the ledger accounts 2 It is prepared with the balances of assets and liabilities accounts.
3 It is not a part of final accounts 3 It is an important part of final accounts.
4 It is prepared before the preparation of final accounts 4 It is prepared after the preparation of trading and profit and loss account.
5 It may be prepared a number of time in an accounting year. 5 It is generally prepared once at the end of accounting year.
6 Generally, it includes opening stock but not closing stock. 6 It always includes closing stock but not opening stock.
7 There is no rule for arranging the ledger balances in it. 7 Assets and liabilities must be shown in it according to the rule of marshaling.
8 It is not required to be filed to anybody. 8 It must be filed with the registrar of companies if the business is a company.
9 Auditor need not to sign it. 9 Auditor must sign it.
Definition and Explanation of Final Accounts
Trial Balance - A Starting Point for Final Accounts
Meanings and Sources of Revenue
Direct and Indirect Expenses
Matching Revenue and Expenses
Trading Account
Profit and Loss Account
Difference between Trading Account and Profit and Loss Account
Difference between Gross Profit and Net Profit
Balance Sheet
Difference between Trial Balance and Balance Sheet
Example of Trading and Profit and Loss Account and Balance Sheet




 

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