TRIAL BALANCE vs BALANCE SHEET

What is the trial balance?

• A report showing the total debits and credits in each account

• A report showing the closing balances of all general ledger accounts at a single point in time

What is the balance sheet?

• A snapshot of a business's assets, liabilities, and equity at a single point in time

• A report used to summarize a business's financial performance, position, and cash flow

What is the purpose of the trial balance?

• To check the integrity of financial data

• To report a business's assets, liabilities, and equity

What is the purpose of the balance sheet?

• To show the total debits and credits in each account

• To report a business's assets, liabilities, and equity

What does the trial balance show?

• Closing balances of all general ledger accounts

• Total debits and credits in each account

What does the balance sheet show?

• Assets, liabilities, and equity

• Total debits and credits in each account

What is the purpose of financial statements?

• To check the integrity of financial data

• To summarize a business's financial performance, position, and cash flow

Who are the stakeholders of a business?

• Employees and managers

• Existing and potential investors, lenders, and creditors

When do accountants typically prepare a balance sheet?

• At the end of each financial year

• Every month

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

• The trial balance and the balance sheet have no connection

• The trial balance is used to create the balance sheet