Basis
of Distinction
|
Trial
Balance
|
Balance
sheet
|
Object
|
A Trial Balance is prepared to check
the arithmetical accuracy of books of accounts.
|
A Balance Sheet is prepared to know
the financial position of an enterprise on a particular date.
|
Sides
|
Left Hand Side of a trial balance is
called ‘Debit side’ while right side is called ‘Credit side’.
|
Left hand side of a balance sheet is
called ‘Liabilities’ side while right hand side is called ‘Assets’ side.
|
Type
of accounts
|
All types of accounts i.e. personal,
real and nominal find their place in the Trial Balance.
|
Only personal and real accounts are
taken while preparing a Balance Sheet.
|
Stock
|
Normally, the opening stock appears
in the Trial Balance whereas Closing Stock does not appear in the trial
balance.
|
In the Balance Sheet only the
closing stock appears on the ‘Assets’ side.
|
When
to Prepare
|
Trial Balance can be prepared
frequently (say) at the end of a month or a quarter.
|
Balance Sheet is generally prepared
at the end of the accounting period.
|
Source
|
Trial Balance is prepared with the
balances of ledger accounts.
|
Balance Sheet is prepared with the
information supplied by the trial balance.
|
Necessity
|
The preparation of trial balance is
not compulsory from legal point of view.
|
It is legally compulsory to prepare
a Balance Sheet at the end of the accounting period.
|
Net
Profit/Net Loss
|
Information about net profit or net
loss is not provided in a trial balance.
|
Information about net profit or net
loss is provided in the balance sheet.
|
Adjustments
|
A trial balance can be prepared
without making adjustments for outstanding expenses, prepaid expense, accrued
income etc.
|
A balance sheet can not be prepared
without making year end adjustments for outstanding expenses, prepaid
expenses, accrued income etc.
|