Give any five points of difference between a Balance Sheet and a …

Question

Give any five points of difference between a Balance Sheet and a Trial Balance.

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Answer

Distinction between Trial Balance and Balance Sheet
	Basis of Difference	Trial Balance	Balance Sheet
1.	Object	It is prepared to check the arithmetical accuracy of the books of accounts.	It is prepared to know the true financial position of the firm.
2.	Information about profit or loss	It is not possible to have information about net profit or net loss from a trial balance.	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.
3.	Necessity	Though desirable, its preparation is not necessary.	It is necessary to prepare a Balance Sheet.
4.	Headings	The headings of its two columns are debit and credit.	The headings of its two sides are assets and liabilities.
5.	Period	It is normally prepared every month or whenever needed.	It is normally prepared half-yearly or yearly at the end of the accounting period.

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Stock on 31st March, 2017 was valued ₹ 26,000.
General Manager is entitled to a Commission of 5% on Net Profits after charging such Commission.
₹ 2,000 paid for Salary & Wages have been included in Sundry Debtors.
Increase Bad-debts by ₹ 800 and create provision for Doubtful Debts at 10%.
General Expenses include insurance premium paid up to 30th June, 2017 @ ₹ 3,000 per annum.
₹ 600 out of the Advertisement Expenses are to be carried forward to the next year.
Charge one-fourth of 'Salaries and Wages' to Trading A/c.
Accrued Income ₹ 2,500.

Commission received in advance ₹ 1,000.
Rent receivable ₹ 2,000, subject to levy of CGST and SGST @ 9% each.
Salary outstanding ₹ 1,000 and insurance prepaid ₹ 800.
Further Bad-debts ₹ 1,000 and provision for Bad-debts @ 5% on debtors and provision for discount on debtors @ 2%.
Closing Stock ₹ 32,000.
Depreciation on Building @ 6% p.a.

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Cheques deposited but not yet credited by the bank ₹ 6,000.
Cheques dishonoured and debited by the bank but not given effect to it in the Ledger ₹ 800.
Bank charges debited by the bank but Debit Memo not received from the bank ₹ 50.
Interest on overdraft excess credited in the Ledger ₹ 200.
Wrongly credited by the bank to account, deposit of some other party ₹ 900.
Cheques issued but not presented for payment ₹ 400.

Shop Fittings are to be depreciated by ₹ 780.
Aditya has drawn ₹ 100 per week for his own use.
Included in the Trade Debtors is an irrecoverable balance of ₹ 270.
Interest at 5% p.a. is due on the loan from Naresh but has not been paid for the year.

	₹		₹
Wages	8,514	Opening Stock	19,380
Purchases	28,380	Office Rent	5,400
Carriage and Freight on Goods Purchased	3,510	Sales	78,600
Returns Inward	8,600	Returns Outword	6,000
Closing Stock	18,000	Custom Duty	300
Power and Fuel	2,600	Trade Expenses	4,200