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.
Suggest a Question
Subscribe to Q&A
Comments
One Response to “What is the difference between a trial balance and a balance sheet?”
Leave a Reply
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.