Trial balance is a part of accounting process which is a list of debit and credit balances taken from all the ledger accounts. The trial balance may be prepared on daily or weekly or monthly or at the end of the accounting period to check the arithmetical accuracy in recording and posting .The periodicity of preparing trial balance is as per the requirement of the organization. The trial balance will have debits and credits columns. The summary of debit balances and credit balances shall be equal in the trial balance. This is because every debit has a corresponding credit and if posted methodically then the total of both the columns would be equal.
The key differences between Trial Balance and balance sheet are that the Trail balance is only the list of all balances of General Ledger Account whereas the Balance sheet is the statement which shows the assets, equity and liabilities of an entity. Simply opening stock is considered in Trial Balance whereas only closing stock is considered in the balance sheet. Trial Balance is used only for internal use whereas Balance Sheet is used both for internal and external uses i.e. to inform the stake holders and outside parties about the financial condition of the entity. Trial balance can be taken any number of times in a year according to requirements of the organization. Balance sheet is prepared on a particular date normally at the end of a financial year to ascertain the financial position of the entity as of a particular date. The preparation of Trial Balance is not prerequisite at all, but the preparation of Balance Sheet is obligatory for every company.
