A:

There are many differences between a trial balance and a balance sheet. For example, a trial balance is an internal report that stays in the accounting department, while a balance sheet is a financial statement that is distributed to other departments and often outside the company to investors and lenders.

The trial balance is a built-in report in most accounting software programs which lists the ending balance in each account, typically at the end of each reporting period.

The trial balance can be used to make certain that total debits equals total credits, to perform an audit of the ending balances in accounts, to build a working trial balance that includes adjusting entries, or to create a balance sheet and income statement in the absence of any software specific to those purposes.

The trial balance proves information at the account level, and is therefore more granular. It includes the balances of real, nominal and personal accounts.

In contrast, the balance sheet shows only the balances of real and personal accounts. Also, unlike the trial balance, the balance sheet aggregates multiple accounts, summing up the amount of assets, liabilities and shareholders' equity in the accounting records at a specific time.

The balance sheet includes outstanding expenses, accrued income, and the value of closing stock, whereas the trial balance does not. Another way that the two differ is that a balance sheet must be constructed according to a standard format as described in an accounting framework, such as International Financial Reporting Standards (IFRS) or Generally Accepted Accounting Principles (GAAP).

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