| Difference | Trial Balance | Balance Sheet |
| 1. Meaning | Statement showing debit and credit balance of accounts is called a Trial Balance. | Statement showing the financial position of the business on a particular date is called a Balance Sheet. |
| 2. Objectives | The objective of preparing Trial Balance is to know the arithmetical accuracy of the accounts. | The objective of preparing Balance Sheet is to know the financial positioning of the business. |
| 3. Columns or Sides | In the Trial Balance two columns of Debit balance and Credit balance are there. | In the Balance Sheet two sides, – ‘Liabilities’ and Assets’ are there. |
| 4. Part of accountancy | To prepare a Trial Balance is not a part of accountancy. | To prepare a Balance Sheet is a part of accountancy. |
| 5. Accounts to be shown | In the Trial Balance, every account is there. | In the Balance Sheet, only personal accounts and real accounts are shown. |
| 6. Time of preparing | Trial Balance can be prepared many times in a year. | Balance Sheet is normally prepared at the end of the accounting year. |
| 7. Adjustment | While preparing Trial Balance any adjustment will not be considered. | While preparing Balance Sheet all the necessary adjustments are to be considered. |
| 8. Necessity | It is not compulsory to prepare a Trial Balance. | It is compulsory to prepare a B/S because it is a part of the annual account. |
| 9. Financial position | From the Trial Balance financial position of the business cannot be known. | From the Balance Sheet financial position of the business can be clearly known. |
| 10. Net profit or Net loss | Information about Net profit or Net loss is not available in a Trial Balance. | Information about Net profit or Net loss is available in Balance Sheet. |
| 11. When is it prepared? | Trial Balance is prepared before preparing the annual accounts. | Balance Sheet is prepared at last while preparing the annual accounts. |
| 12. Arrangement of balances | There is no restriction for the arrangement of the balances which are to be shown in the Trial Balance. | Balance Sheet can be prepared in two different arrangements : (1) In the order of permanency and (2) In the order of liquidity. Generally, in most of the firms, Balance Sheet is prepared in the order of permanency. The order of liquidity is more suitable for banks and financial institutions. |
