Definition of Trial Balance
A trial balance is an internal report that remains in the accounting department. The trial balance lists all of the accounts in the general ledger and their balances (or all of the accounts that have balances). However, the debit balance amounts are entered in one column and the credit balance amounts are entered in another column. Each column is then summed to prove that the total of the debit balances is equal to the total of the credit balances. (In a manual accounting system, the trial balance would draw attention to the errors occurring when transactions were journalized, posted, account balances computed, etc. With accounting software, these clerical errors are unlikely.)
Definition of Balance Sheet
A balance sheet is one of the five financial statements that are distributed outside of the accounting department and are often distributed outside of the company. The balance sheet summarizes and reports the balances from the asset, liability, and stockholders’ equity accounts that are contained in the company’s general ledger. The balance sheet is also referred to as the statement of financial position.
