Question 16 Marks
Give any five points of difference between a Balance Sheet and a Trial Balance.
Answer
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Distinction between Trial Balance and Balance Sheet
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Basis of Difference
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Trial Balance
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Balance Sheet
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1.
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Object
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It is prepared to check the arithmetical accuracy of the books of accounts.
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It is prepared to know the true financial position of the firm.
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2.
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Information about profit or loss
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It is not possible to have information about net profit or net loss from a trial balance.
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Since net profit or loss is recorded in the Capital shown in Balance Sheet, it is possible to have the information about net profit or net loss from a Balance Sheet.
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3.
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Necessity
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Though desirable, its preparation is not necessary.
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It is necessary to prepare a Balance Sheet.
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4.
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Headings
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The headings of its two columns are debit and credit.
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The headings of its two sides are assets and liabilities.
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5.
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Period
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It is normally prepared every month or whenever needed.
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It is normally prepared half-yearly or yearly at the end of the accounting period.
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*Drawings = Household Expenses + Life Insurance Premium = 10,000 + 1,800 = ₹ 11,800.
Closing Stock was valued at ₹ 35,000. Prepare Trading and Profit and Loss Account for the year ended 31st March, 2017 and Balance Sheet as at that date.
Value of Closing Stock was ₹ 36,500 on 31st March, 2017.
Prepare a Trading and Profit and Loss Account for the year ended on 31-3-2016 and the Balance Sheet as at that date. The Stock on 31st March, 2016 was ₹ 22,000.
