A trial balance and a balance sheet are two important financial documents used to record and report the financial position of an organization. Both serve different purposes, but provide insight into the overall financial health of a business. This article will explain the differences between a trial balance and a balance sheet.
About Difference Between Trial Balance And Balance Sheet
| Trial Balance | Balance Sheet |
|---|---|
| Records debits & credits of all accounts | Assets, liabilities & equity |
| Accounts are listed in order | Classified into different categories |
| Provides unadjusted balances | Shows adjusted balances |
| Used to prepare financial statements | Reflects company's financial position |
| No effect on the accounting equation | Affects the accounting equation |
| Prepared at end of an accounting period | Prepared anytime during the year |
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