The difference between a trial balance and balance sheet
/The main difference between the trial balance and a balance sheet is that the trial balance lists the ending balance for every account , while the balance sheet may aggregate many ending account balances into each line item.
What is a Balance Sheet?
The balance sheet is part of the core group of financial statements . It may be issued only for internal use, or it may also be intended for such outsiders as lenders and investors . The balance sheet summarizes the recorded amount of assets , liabilities , and shareholders' equity in a company's accounting records as of a specific point in time (usually as of the end of a month). It is constructed based on the accounting standards described in one of the accounting frameworks , such as Generally Accepted Accounting Principles or International Financial Reporting Standards .
What is a Trial Balance?
The trial balance is a standard report in most accounting software that lists the ending balance in every account as of a specific point in time (again, usually as of month-end). The report is only used within the accounting department and as a source document by a company's auditors . This report has multiple uses:
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To verify that the total dollar amount of debits equals the total dollar amount of credits
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For use in constructing a working trial balance that includes adjusting entries
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For use in constructing a balance sheet and income statement , if there is no accounting software to do so automatically
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For use by auditors to obtain the ending balances in accounts
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Comparing a Trial Balance and Balance Sheet
Thus, the differences between a trial balance and balance sheet are as follows:
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Aggregation . The balance sheet aggregates multiple accounts, while the trial balance presents information at the account level (and is therefore more detailed).
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Standards . The balance sheet is structured in accordance with specific accounting standards, while there is no mandated format for a trial balance.
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Usage . The balance sheet is intended for external use, while the trial balance is for use within the accounting department and by auditors.
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Reporting level . The balance sheet is a final report, while the trial balance is used to construct other reports.
