TRIAL BALANCE AND BALANCE SHEET

TRIAL BALANCE AND BALANCE SHEET
Trial balance and balance sheet
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TRIAL BALANCE AND BALANCE SHEET

TRIAL BALANCE AND BALANCE SHEET
TRIAL BALANCE AND BALANCE SHEET

A balance sheet is a part of the accounting process, which is a schedule of debit and credit balances taken from all ledger accounts. Differences between the Trial Balance and Balance Sheet both contain the debit and credit data of the business.

As every transaction affects two parties, that is, every debit has the same credit and the reverse is also true. Total debit and credit balances are equal in the trial balance. In contrast, the balance sheet displays the company’s financial position by summarizing assets, liabilities, and capital on a particular date.

DIFFERENCE BETWEEN TRIAL BALANCE AND BALANCE SHEET

A balance sheet is a part of the accounting process, which is a schedule of debit and credit balances taken from all ledger accounts. Differences between the Trial Balance and Balance Sheet both contain the financial data of the business.

As every transaction affects two parties, that is, every debit has the same credit and the reverse is also true. Total debit and credit balances are equal in the trial balance. In contrast, the balance sheet displays the company’s financial position by summarizing assets, liabilities, and capital on a particular date.

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In general, the test is prepared at the end of the remaining month or at the end of the accounting period, ie it can be prepared as per the requirement of the unit. On the other hand, the balance sheet is prepared only at the end of the accounting period. So, here in this article, we are going to talk about the difference between a trial balance and a balance sheet, read.

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Trial Balance: TRIAL BALANCE AND BALANCE SHEET

A trial balance is a statement of debit and credit balance drawn from all ledger accounts including the cash book. The golden rule that “the accounting equation is balanced at all times” and “there are uniform debit and credit for every business transaction” will always prevail throughout accounting principles. Therefore, the total number of all debit balances should be equal to all credit balances.

The following are the differences in the trial balance given below:

TRIAL BALANCE AND BALANCE SHEET
TRIAL BALANCE AND BALANCE SHEET

A trial balance is a statement that shows the debit and credit balances of all ledger accounts on a particular date; This includes personal, real as well as nominal account balances.

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The purpose of preparing trial balance is to test the arithmetic accuracy of books of accounts.

Trial balance is drawn more often; It can be prepared weekly, monthly, quarterly, or semiannually. It is definitely prepared at the end of the accounting year before the final accounts are prepared.

The trial balance is designed for internal use only.

Trial Balance: TRIAL BALANCE AND BALANCE SHEET

  1. Trial balance is a schedule showing the equality of all debits and credits.
  2. The purpose of preparing a trial balance is to verify whether all debit balances are equal to all credit balances.
  3. All debit and credit balances are to be withdrawn from all accounts including the cashbook and shown in this schedule
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4.  Generally, a trial balance is prepared every month or at any time to verify the accuracy of the books of accounts.

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5. The test balance is prepared without taking any adjustments into consideration.

6. All items are shown under two headings debit and credit.

 

Balance sheet-TRIAL BALANCE AND BALANCE SHEET

TRIAL BALANCE AND BALANCE SHEET
TRIAL BALANCE AND BALANCE SHEET

A balance sheet is a part of the accounting process, which is a schedule of debit and credit balances taken from all ledger accounts.

Differences between the Trial Balance and Balance Sheet both contain the financial data of the business. As every transaction affects two parties, that is, every debit has the same credit and the reverse is also true. Total debit and credit balances are equal in the trial balance.

In contrast, the balance sheet displays the company’s financial position by summarizing assets, liabilities, and capital on a particular date.

  1. A balance sheet is a statement that shows the position of assets and liabilities of the business.
  2. The purpose of preparing the balance sheet is to show a true and fair view of the business enterprise on a particular day and at a particular time.
  3. Only the balance of real and personal accounts is to be shown on the balance sheet.
  4. Generally, the balance sheet is prepared at the end of the accounting year.
  5. The balance sheet is prepared with the help of some adjustments related to the business venture.
  6. All items are shown under two headings i.e. Assets and Liabilities.

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