Distinguish between a Balance Sheet and Trial Balance. (Any five …

Question

Distinguish between a Balance Sheet and Trial Balance. (Any five points)

✓

Answer

Difference between Fixed Assets and Current Assets:

	Basis	Balance Sheet	Trial Balance
1.	Purpose	The purpose is protray finacial position.	The purpose is to establish arithmetical accuracy of the books of account.
2.	Information about Profit	It provides information as to prolitablity and finacial position of the firm.	No such information is possible from Trial Balance.
3.	Necessity	It is essential to prepare Balance Sheet to complete the accounting process.	Though desirable, it may be possible to dipense with its preparation.
4.	Headlings	The two sides are headed as assets and liabilities.	The two columns are headed as debit and credit.
5.	Coverage	Only personal and real accounts appear in the Balance Sheet.	In the Trial Balance all accounts must be written, no account can be left out.
6.	Closing Stock	This account appears in the Balance Sheet.	Normally, a closing stock does not appear in the Trial Balance.
7.	Period	Normally, it is prepared only at the end of the accounting period.	A Trial Balance can be prepared at any time, even monthly or whenever required.
8.	Adjustment	A Balance Sheet cannot be prepared without making adjustments for outstanding and prepaid items and without taking into account all events and transaction for the year.	A Trial Balance can be prepared at any stage, without even making adjustments.
9.	Accounts	Only Asset, Liability and Capital Account are shown.	All account i.e., Asset, Liability, Capital, Income and Expense Account are shown.

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2019		₹
April 1	Cash balance ₹ 2,000, bank balance ₹ 24,500
April 2	Cash sales ₹ 60,000 plus CGST and SGST @ 6% each
April 5	Deposited in Bank	50,000
April 7	Issued cheque to Sohan	10,000
April 9	Sold goods for cash ₹ 10,000 plus CGST and SGST @ 6% each
April 12	Received a cheque from National Insurance Co. Ltd. against claim lodged last year	19,800
April 14	Sold goods to Niraj of ₹ 25,000 plus CGST and SGST @ 6% each, received cash ₹ 10,000 and balance by cheque. Allowed him discount ₹ 500
April 16	Purchased furniture for ₹ 10,000 plus CGST and SGST @ 6% each, paid for furniture by cheque
April 18	Sold old furniture for ₹ 10,000 plus CGST and SGST @ 6% each and received cash
April 20	Paid into bank cheque of Niraj and cash	2,500
April 22	Paid to Suman by cheque	2,500
April 26	Suman's cheque returned on technical ground and paid cash for equal amount
April 28	Bank charged its commission of ₹ 300 plus CGST and SGST @ 6% each
April 29	Bank paid insurance premium as per standing instructions	2,500
April 30	Nigam paid into bank directly, intimation received on the same day	5,000

An amount of ₹ 2,000 received from Mohan on 1st April, 2019 had been entered in the Cash Book as having been received on 31st March, 2019.
The balance in the account of Rahim ₹ 1,000 had been written off as bad but no other account has been debited.
An addition in the Returns Inward Book had been cast ₹ 100 short.
A cheque for ₹ 200 drawn for the Petty Cash Account has been posted in the account of Asif.
A discounted Bill of Exchange for ₹ 20,000 returned by the firm's bank had been credited to the Bank Account and debited to Bills Receivable Account. A cheque was received later from the customer for ₹ 20,000 and duly paid.
Ramesh's Account was credited with ₹ 840 twice instead of once.