Difference Between Trial Balance And Balance Sheet

In this blog post, we will find the answer to the Question, “What is the Difference Between Trial Balance And Balance Sheet?

Also Check Out, “Difference Between Ledger And Bank Reconciliation”

1. Trial Balance shows Arithmetic Accuracy of different types / kinds of Accounts’ Balances transferred from concerned Ledgers while Balance Sheet is a Statement of Financial Position and shows the Equality of Assets with Liabilities And Equity on a Particular Time or in other words it shows Accounting Equation that is Assets = Liabilities + Owner’s Equity.

2. Trial Balance is the 4^th Step of Accounting Cycle while Balance Sheet is the 5^th Step of Accounting Cycle so Trial Balance comes first while Balance Sheet comes later on and hence any errors and mistakes in Trial Balance will also transferred to Balance Sheet.

3. Trial Balance is prepared by the Accounting Department of the company and it is showed only to the Internal Management of the company unless there are serious issues, i.e, in case of Frauds, Sue, etc., while Balance Sheet is the part of Financial Statements and it is reported to all of the Users of Financial Statements at the end of Accounting Period.

So, we can say that Trial Balance shows Arithmetic Accuracy of Ending Balances of Different types of Accounts transferred from Concerned Ledgers and it comes first while Balance Sheet shows Financial Position on a Particular Time of a Business and it comes later on and prepared at the End of Accounting Period.