And from trial balance, we can make a balance sheet which we will create in this article.
There are many differences between trial balance vs balance sheet.
Here, cash is an “asset” account and capital is a “liability” account and both are increasing.
According to the rule of debit and credit, if a “liability” account increases, we will credit the account; and if an “asset” account decreases, we will debit the account. The journal entry was – Cash A/C……Debit…..,000 – To Capital A/C……Credit…
In this section, we will look at a complete trial balance and then in the next section “What is Balance Sheet? Under balance sheet, these two accounts get balanced. Under assets, first, we will consider “current assets”.If you want to understand trial balance, we need to start from debit, credit, journal, and ledger.If these four concepts are digested, trial balance becomes easy.The simple rules of debit and credit are as follows.You need to remember these rules to record all the transactions in future.