LSP_Statement of Final Accounts

Difference between Trial Balance and Balance Sheet:

Trial Balance		Balance Sheet
1.	A Trial Balance is prepared to check the arithmetical accuracy of the books of accounts.	1.	A Balance Sheet is prepared to know the financial position of the business enterprise on a given date.
2.	A Trial Balance can be prepared frequently. It may be prepared at the end of a month or a quarter.	2.	A Balance Sheet is generally prepared at the end of the accounting period.
3.	The heading of the two columns are “Debit Balances” and “Credit Balances”.	3.	The headings of the two sides are “Liabilities” and “Assets”.
4.	All types of accounts find their place in the Trial Balance.	4.	In a Balance Sheet, accounts of assets, liabilities, capital and those accounts which are remained open after the preparation of Trading and Profit and Loss account.
5.	Generally, the opening stock appears in the Trial Balance, whereas the closing stock does not.	5.	In a Balance Sheet, only the closing stock appears on the assets side.
6.	In a Trial Balance, it is not possible to have information about net profit or net loss.	6.	In the Balance Sheet, information about net profit earned or net loss incurred is provided.
7.	A Trial Balance can be prepared without making adjustments regarding prepaid expenses, income received in advance, accrued income, etc.	7.	A Balance Sheet can not be prepared without making adjustments regarding prepaid expenses, outstanding expenses, income received in advance or accrued income, making provisions for possible losses, etc.

Difference between Trading and Profit and Loss Account and Balance Sheet:

The basic difference between the Trading and Profit and Loss Account and the Balance Sheet lies in their need for preparation, structure and form.


1.	The Trading and Profit and Loss Account is prepared to ascertain the results of business operations during a given period whereas the Balance Sheet is prepared to know the financial position of the business at a particular date.
2.	Revenue and expense accounts are shown in the Trading and Profit and Loss Account while in the Balance Sheet, only those accounts appear, which remain open after the preparation of the Trading and Profit and Loss Account.
3.	The Trading Account and Profit and Loss Account is a ledger account; it has debit side and credit side and its balance is transferred to the Capital Account. The Balance Sheet is only a statement of Assets and Liabilities.