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To know the difference between the Ledger and Trial Balance, first of all, we have to know the meaning of both terms. These are explained as follows: –
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What is the meaning of Ledger: –
These are those books of accounts, in which the accountant has to show all the transactions separately related to all types of accounts, which are already recorded in the journal Daybook. This is maintained in alphabetical order. With the help of a ledger, we can get whole information about any particular account because on which all the related journal entries are posted on continuous pages of this book. but in the journal, all the transactions are recording date-wise, so we have to check all pages of the journal daybook and if we want to know the balance of a particular account then it is very difficult to get it from Journal.
To know the details about the Ledger, Please check out the following link:
What is Ledger in accounting – explain its Types
What is the meaning of Trial Balance: –
Trial Balance shows the total closing balance of all the ledger accounts for the specific period i.e. for a month, for a quarter, for a six month, and for a whole year. In the double-entry accounting system, there is always the same amount of Credit corresponding to every Debit. So, the total of both columns (Debit & Credit) of the trial balance is always equal, if not then there is an error in the posting of the transactions.
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To know the details about the Trial Balance, Please check out the following link:
Trial Balance | Explanation | Methods | Examples
Chart of Difference between the Ledger and Trial Balance: –
Basis of Difference | Ledger | Trial Balance |
Meaning | These are those books of accounts, in which the accountant has to show all the transactions separately related to all types of accounts, which are already recorded in the journal Daybook. | Trial Balance showing the equality of both columns i.e. Debit and Credit. |
Object | It is prepared to get the balances of each account. | It is prepared to authenticate the arithmetical accuracy of recording and posting all business transactions. |
Accounts Included | It includes all types of accounts. i.e. Real, Personal and Nominal accounts But shown Speratly by preparing separate Ledger for each type of account. | It includes all types of accounts. i.e. Real, Personal and Nominal accounts and shows together in a single statement. |
Dependency | The Ledger is dependent on Journal Daybook. | The trial balance is dependent on the ledger account and subsidiary books not on the balance sheet. |
Necessity | The Ledgers are prepared to know the balance of each account which is further posted into the trial account. | The trial balance is a summary of all ledger account balances. It is not necessary to prepare by any act or law. We have prepared it to simplify our process of preparing Financial Statements. |
Classification of Accounts | In trial Balance, all accounts are classified into five major categories i.e. Assets, Capital, Liabilities, Expenses, and Income. | In trial Balance, all accounts are classified into two categories the accounts with the debit balance and the accounts with the Credit balance. |
Time of Preparation | These are prepared on a daily basis. | It is prepared before the preparation of Financial Statements. |
Number of Sides | It has two sides i.e. Debit and Credit | It is a statement, so it has two columns i.e. Debit balance and Credit Balance |
Financial Statements | The Ledger is the base of the Trial balance, So indirectly it is important for Financial Statements. | The trial balance is the basis of financial statements. |
Download the chart: –
If you want to download the chart please download the following image and PDF file:-
The conclusion of Difference: –
There is much difference between these two terms. The trial balance is prepared to check the error in the process of recording and posting the transactions but the ledger is prepared to get the net balance of accounts.
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