DIFFERENCE BETWEEN TRIAL BALANCE AND BALANCE SHEET :
Trial balance | Balance sheet |
1. It is a statement of debit balances and credit balances taken from the ledger. | 1. It is a statement of assets and liabilities |
2. It is prepared to test the arithmetical accuracy of books of account. | 2. It is prepared to ascertain the financial position of the organization on a particular date. |
3. Balances of all types of accounts i.e. personal, real, and nominal accounts are shown. | 3. Balances of real and personal accounts only are shown. |
4. It is usually prepared at the end of each month, three months, six months or at the end of accounting year before the preparation of trading and profit and loss account. | 4. It is usually prepared at the end of the year after the preparation of trading and profit and loss account. |
5. Closing stock does not appear in the trial balance. | 5. Closing stock is shown on the assets side of the balance sheet. |
6. It is prepared for internal use. | 6. It is prepared for external use, i.e. for outside parties such as, creditors, shareholders (in case of companies), government authorities, etc. |