S. No |
Basis Distinction |
Trial balance |
Balance sheet |
1 |
Objective |
To know the arithmetical accuracy of the accounting work. |
To know the true and fair financial position of a business. |
2 |
Format |
The columns are debit balances and credit balances. |
The two sides are assets and liabilities. |
3 |
Content |
It is a summary of all the ledger balances – personal, real and nominal accounts. |
It is a statement showing closing balances of personal & real accounts. |
4 |
Stage |
It is the middle stage in the preparation of accounts. |
It is the last stage in the preparation of accounts. |
5 |
Period |
It can be prepared periodically, say at the end of the month, quarterly or half yearly, etc. |
It is generally prepared at the end of the accounting period. |
6 |
Preparation |
It is prepared before the preparation of trading, profit and loss account. |
It is prepared after the preparation of trading, profit and loss account. |
7 |
Stock |
It shows opening stock only. |
It shows closing stock only. |
8 |
Order |
Balances shown in the trial balance are not in order. |
Balances shown in the balance sheet must be in order. |
9 |
Evidence |
It cannot be produced as a documentary evidence in the court. |
It can be produced as a documentary evidence. |
10 |
Compulsion |
Preparation of trial balance is not compulsory. |
Preparation of the balance sheet is a must. |
