Question

Distinguish between a Balance Sheet and a Trial Balance. 

Give two points of distinction between balance sheet and trial balance.

Answer 1

S. No.	Trial Balance	Balance Sheet
1.	A Trial Balance maintains the accuracy of the books of accounts.	A Balance Sheet reflects a company's financial situation as of a specific date.
2.	A Trial Balance can be created periodically. It might be prepared at the end of the month or quarter.	A Balance Sheet is typically generated at the end of an accounting period.
3.	The two columns are labelled "Debit-Balances" and "Credit-Balances".	The two sides are labelled "Liabilities" and "Assets".
4.	The Trial Balance includes all account kinds.	A Balance Sheet includes accounting for assets, liabilities, capital, and any remaining balances after preparing Trading and Profit and Loss statements.
5.	The Trial Balance often shows the opening stock but not the closing stock.	A Balance Sheet simply shows the closing stock on the asset side.
6.	A trial balance does not allow for profit. To obtain information about net profit or loss.	The Balance Sheet shows net earnings and losses.
7.	A Trial Balance can be calculated without adjustments for expenses, prepaid expenses, money received in advance, and accrued income.	Preparing a Balance Sheet requires adjustments for prepaid outstanding expenses, accrued revenue, and potential losses.