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This question is about list of skills.
Balance sheet vs. trial balance
The difference between a balance sheet and a trial balance is that the trial balance is used to prepare the financial statements, while the balance sheet is the result of the financial statements.
A trial balance is a summary of the balances in each of a company's general ledger accounts. It is typically used to confirm that the debits and credits in the general ledger are equal.
While a balance sheet is a financial statement that summarizes a company's assets, liabilities, and shareholder's equity at a specific time, it is typically used to provide an overview of a company's financial position.
A balance sheet is a financial statement that summarizes a company's assets, liabilities, and shareholder equity at a specific point in time, whereas a trial balance is an internal document used by accountants to check the arithmetical accuracy of the debits and credits recorded in the general ledger.
The balance sheet is a snapshot of the financial position of a business at a particular moment in time, usually at the end of an accounting period, while the trial balance is a report of all the ledger accounts of a business that lists the ending balances in all the general ledger accounts.
Key Takeaways:
| Balance Sheet | Trial Balance |
|---|---|
| The balance sheet is a financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. | The trial balance is a bookkeeping or accounting report that lists the balances in each of an organization's general ledger accounts |
| The balance sheet is used to gain insight into the financial strength of a company. | The trial balance is used to ensure that the debits equal the credits in a company's general ledger accounts |
| The balance sheet is typically formatted as a list of assets followed by liabilities and shareholders' equity. | The trial balance is typically formatted as a two-column table that lists the account name and its associated debit or credit balance. |
| The balance sheet is used to assess the financial health of a company. | The trial balance is used to detect errors in the accounting records |
| The balance sheet contains information on the company's assets, liabilities and shareholders' equity. | The trial balance contains a list of the company's general ledger accounts and their corresponding balances |
| The balance sheet is updated when financial transactions occur | The trial balance is updated when financial transactions occur. |
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