Difference between the Ledger and Trial Balance

Difference between the Ledger and Trial Balance

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: –

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 journal Daybook. This is maintained on the alphabetical order. With the help of ledger, we can get whole information about any particular account because on which all the related journal entries are posted on continues pages of this book. but in the journal, all the transactions are recording date wise, so we have to check all pages of 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 – Explained with Example

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 the Credit corresponding to every Debit. So, the total of both column(Debit & Credit) of the trial balance is always equal, if not then there is an error in the posting of the transactions.

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 journal Daybook. Trial Balance showing the equality of both column 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 of all business transaction.
Accounts Included 
It includes all type of accounts. i.e. Real, Personal and Nominal accounts But shown Speratly by preparing sperate Ledger for each type of account.  It includes all type 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 are further posted into trial account.   The trial balance is a summary of all ledger account balance. 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 Trial balance, So indirectly it is important for Financial Statements. The trial balance is the base of financial statements.

Download the chart: –

If you want to download the chart please download the following image and PDF file:-

Chart of Difference between the Ledger and Trial Balance 202x300 - Difference between the Ledger and Trial Balance
Chart of Difference between the Ledger and Trial Balance
application pdf - Difference between the Ledger and Trial Balance
Chart of Difference between the Ledger and Trial Balance – PDF

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 of the transactions but the ledger is prepared to get the net balance of accounts.

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T.S. Grewals Double Entry Book Keeping - Difference between the Ledger and Trial Balance

T.S. Grewal’s Double Entry Book Keeping

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