Balance sheet and a trial balance

Question

Write down the dissimilarity between a balance sheet and a trial balance?

Answer 1

- Trial balance is a catalog of balances from the ledger account whereas balance sheet is a statement of liabilities and assets.

- Trial balance consists of balances of all personal, nominal and real accounts, whereas balance sheet consists of balances of only those real and personal accounts that represent liabilities and assets.

- Trial balance is made before preparation of trading and loss and profit account, whereas balance sheet is made subsequent to the preparation of trading and loss and profit account.

- Trial balance is made to make sure the arithmetical accuracy of posting in ledger whereas balance sheet is made to point out the financial position of the business on a specific date.

- Debit & credit balances are shown side-by-side whereas balance sheet is made on a ‘T’ form basis, the left hand side showing liabilities whereas right hand side showing assets.

- Closing stock does not show in the trial balance whereas it is shown on the assets side of balance sheet.