Q15RQ - Horngren'S Financial And Managerial Accounting

Question

What is the difference between the trial balance and the balance sheet?

Step-by-Step Solution

Answer

A balance sheet is a financial statement that shows the financial position, and a trial balance is a worksheet that is prepared to check the accuracy of the accounts.

Step 1: Definition of Balance Sheet

The balance sheet is a statement of financial nature that reports the company's financial health by showing assets, liabilities, and equity.

Step 2: Difference between the trial balance and the balance sheet

The significant difference between the trial balance and balance sheet is that the trial balance only shows the equality of debits and credits, and it is for internal use only. The balance sheet, on the other, shows the accounting equation of the business, and it is a financial statement that both internal users and external users can use.