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July 17, 2006

What is the difference between a trial balance and a balance sheet?

The trial balance is an internal document—it stays in the accounting department. It is a listing of all of the accounts in the general ledger (balance sheet accounts and income statement accounts) and their respective balances as of a specified point in time, such as June 30, 2006. The purpose of the trial balance is to document that the total amount of account balances with debit balances is equal to the total of amount of account balances with credit balances.

The balance sheet is a financial statement that reports the dollar amounts of assets, liabilities, and stockholders’ equity at a specified point, such as June 30, 2006. Since it is a financial statement, it will be distributed outside of the accounting department. As a result, it should be prepared in accordance with generally accepted accounting principles. (Often the balance sheet accounts in the general ledger are summarized and combined so that the resulting balance sheet is only 20 - 30 lines in length.)

Learn more about the Balance Sheet.

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About the Author: Harold Averkamp (CPA) has worked as an accountant, consultant, and university accounting instructor for more than 25 years.

He is the author of the 2010 Master Accounting Download Package which has been praised for it's ability to simplify accounting in a way that anybody can understand.



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Comments

15 Responses to “What is the difference between a trial balance and a balance sheet?”

  1. RJ on July 30th, 2008 8:27 pm

    Hello, I just started a new job and I was given the task of reconciling 4 accounts. Prepaid travel is the first one and I am not sure what to do. I have helped the staff accountants reconcile the cash account at my old job before. But then I was guided along and I remember printing out the cash account report and the detail trail balance report to match up the debits and the credits. I want to keep this new position but I really need help on what to do please. Any information is appreciated.

    Thank you in advance.

  2. SPIKE on February 13th, 2009 5:54 am

    I WANTED TO KNOW THE DIFFERENCE BETWEEN TRIAL & BALANCE SHEET,AS IT WAS PART OF MY HOME AND I FOUND EVERY INFORMATION I WANTED TO KNOW ABOUT………..

  3. Monde on February 26th, 2009 7:03 pm

    thank you

  4. Priti on April 30th, 2009 12:08 am

    Thanks for sending monthly mail without fail. This website is very helpfull & clear all the difficult points.

  5. Jerry on May 30th, 2009 4:48 am

    I was asked by my lecturer about the difference between balance sheet and trial balance but could not make a good differentiation. Kindly help me with one.

  6. Said haji fidow on June 23rd, 2009 11:24 am

    DEAR sir
    I want to know what is financial documents? in accounts. are they same to financial statements?

  7. vijayan on July 21st, 2009 9:58 pm

    dear sir,
    i am working in private concern as a accontant and wish to know about accounting methods

  8. ramakrishnan on September 1st, 2009 2:33 am

    I understand to arrive working Capital the simple formula is to find the difference between current Assests minus Current Liabilities. But to find out the net worth whehter the above formula is Ok. Please reply.

  9. tosin on October 5th, 2009 8:12 am

    difference between non-current assets&current assets

  10. naz g. salimo on October 26th, 2009 1:43 am

    A furniture for example will be subjected to depreciation, when it is fully depreciated, is it a standard practice in accounting to reserve 1 dollar as a net book value for the depreciated furniture?

  11. sayedi Rafi on October 29th, 2009 2:40 am

    I really don’t know how to appreciate for creator of this site infect I am thankful for all of them and especially those that advice us in accounting terminology. This site updating us from new and remained us from old studies help us in our daily tusk

    Thank you once again

  12. Addis on November 4th, 2009 9:46 am

    Hi sir Help me for the descripyion of basic accounting terms

  13. ACoach on November 4th, 2009 10:01 am

    You can find the descriptions of accounting terms on the free website AccountingCoach.com under the Dictionary tab.

  14. komal on November 13th, 2009 2:59 am

    hi i want 2 know abt hw we can do after closing account the enteries of captical or tell me the complete solve income statement with complete information

  15. twinkle on December 11th, 2009 7:18 am

    hi sir, i want to know on how to make a trial balance . im waiting ur reply>><

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