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Difference Between Trial Balance and Balance Sheet:

Learning Objectives:

  1. Differentiate between trial balance and balance sheet.

Following are the main points of difference between trial balance and balance sheet:

Trial Balance

Balance Sheet
1 It is prepared to verify the arithmetical accuracy of books of accounts 1 It is prepared to disclose the true financial position of the business
2 It is prepared with balances of all the ledger accounts 2 It is prepared with the balances of assets and liabilities accounts.
3 It is not a part of final accounts 3 It is an important part of final accounts.
4 It is prepared before the preparation of final accounts 4 It is prepared after the preparation of trading and profit and loss account.
5 It may be prepared a number of time in an accounting year. 5 It is generally prepared once at the end of accounting year.
6 Generally, it includes opening stock but not closing stock. 6 It always includes closing stock but not opening stock.
7 There is no rule for arranging the ledger balances in it. 7 Assets and liabilities must be shown in it according to the rule of marshaling.
8 It is not required to be filed to anybody. 8 It must be filed with the registrar of companies if the business is a company.
9 Auditor need not to sign it. 9 Auditor must sign it.
» Definition and Explanation of Final Accounts
» Trial Balance - A Starting Point for Final Accounts
» Meanings and Sources of Revenue
» Direct and Indirect Expenses
» Matching Revenue and Expenses
» Trading Account
» Profit and Loss Account
» Difference between Trading Account and Profit and Loss Account
» Difference between Gross Profit and Net Profit
» Balance Sheet
» Difference between Trial Balance and Balance Sheet
» Example of Trading and Profit and Loss Account and Balance Sheet

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Financial Accounting Topics
  Introduction to Accounting
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  Transactions and Accounting Equation
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  Analysis of Business Transactions
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  Journal, Ledger and Trial Balance
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  Accounting for Bills of Exchange
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  Special Journals
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  Cash Book
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Bank Reconciliation Statement
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  Final Accounts
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  Work Sheet
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  Capital and Revenue Items
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  Valuation of Inventories
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  Accounts of Non-profit Making Organizations
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  Statement of Cash Flows
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  Accounting Ratios Analysis
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  Depreciation, Provisions and Reserves
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  Accounting Dictionary
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  Financial Calculators
 
 
 
Managerial Accounting Topics
  Financial Statements
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  Cost Volume Profit Relationship
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  Variable Costing System
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  Materials and Inventory Cost Control
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  Activity Based Costing System
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  Standard Costing and Variance Analysis
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  Balanced Scorecard
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  Capital Investment Analysis/Capital Budgeting
 
 

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