General Ledger vs Trial Balance

Updated on January 29, 2024
Article byWallstreetmojo Team
Edited byAshish Kumar Srivastav
Reviewed byDheeraj Vaidya, CFA, FRM

Difference Between General Ledger and Trial Balance

The primary difference between the general ledger and trial balance is that the general ledger prepared by the company is the set of the different master accounts in which the complex transactions of the business are present, having all the accounts. In contrast, the company’s trial balance has only the ending balance present in those accounts of the company.

Preparation of the general ledger and trial balanceTrial BalanceTrial Balance is the report of accounting in which ending balances of a different general ledger are presented into the debit/credit column as per their balances where debit amounts are listed on the debit column, and credit amounts are listed on the credit column. The total of both should be more are two primary actions in the accounting cycle. The critical difference is that a general ledger is a set of accounts containing complex transactions. At the same time, the trial balance is a statement that records the general ledger ending balances.


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 General Ledger vs. Trial Balance Infographics


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Example of General Ledger


Example of Trial Balance

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Suppose we have the following information on XYZ Ltd.

Ledger vs Trial Balance example3

Solution: We need to put respective balances in a suitable debit or credit head.


Flow chart showing the different financial transactions in an organization and steps where general ledger and Trial balance come into the picture:

Ledger vs Trial Balance flowchart

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Key Differences

The key differences are as follows –

General Ledger vs. Trial Balance Comparative Table

BasisGeneral LedgerTrial Balance
MeaningA general ledger is defined as a book of accounts.A trial balance is a listing of the accounts and balances of each of the accounts in the general ledger.
ContentAn organization’s General Ledger is the record containing all its assets, revenue, liability, expense, gain, and loss accounts with the amount in respective accounts.It is an internal report which summarizes accounts with debit balances and accounts with credit balances and proves that the total of the debit balances is equal to the credit balancesCredit BalancesCredit Balance is the capital amount that a company owes to its customers & it is reflected on the right side of the General Ledger Account. Usually, Liability accounts, Revenue accounts, Equity Accounts, Contra-Expense & Contra-Asset accounts tend to have the credit balance. read more.
PurposeThey are prepared for classifying different accounts like assets, liabilities, etc.It is prepared to check the arithmetic accuracy of the total debit and credit balance derived from General Ledger.
Classification of types along with examplesThere are broadly seven classifications of the general ledger.


There are three types of trial balances:


• The unadjusted trial balanceUnadjusted Trial BalanceAn unadjusted trial balance is the account balances reported directly from the general ledger without adjusting for the year-end journal entries. It acts as a starting point for analyzing account balances and adjusting more,

• The adjusted trial balanceAdjusted Trial BalanceAdjusted Trial Balance is a statement which incorporates all the relevant adjustments. Although it is not a part of financial statements, the adjusted balances are carried forward in the different reports that form part of financial statements. read more and,

• The post-closing trial balancePost-closing Trial BalancePost Closing Trial Balance is the list of the all the balance sheet items along with their balances excluding the zero balance accounts and is used for the purpose of verification that temporary accounts are properly closed and the total of balances of all the debit accounts and all the credit accounts are more

Although both are important accounting cycleAccounting CycleAccounting Cycle refers to the process of recording transactions and summarizing them for the preparation of financial statements. The objective is to generate useful information in the form of three financial statements namely Income Statement, Balance Sheet and Cash Flows. read more, there are many differences between them. They both have their respective importance and timing in the business cycleBusiness CycleThe business cycle refers to the alternating phases of economic growth and more. In brief, a general ledger is an account-wise summary of all monetary transactions. In contrast, a trial balance is the debitThe DebitDebit represents either an increase in a company’s expenses or a decline in its revenue. read more and credit balance of such ledger accounts.


It is essential to understand the difference between the general ledger and trial balance accurately since both represent crucial steps in preparing year-end financial statementsFinancial StatementsFinancial statements are written reports prepared by a company's management to present the company's financial affairs over a given period (quarter, six monthly or yearly). These statements, which include the Balance Sheet, Income Statement, Cash Flows, and Shareholders Equity Statement, must be prepared in accordance with prescribed and standardized accounting standards to ensure uniformity in reporting at all more like Balance sheets.

We can conclude that Trial Balance is the heart of any business. It is a summary of the business activities that occurred in an accounting period wherein the business activities are shown through different ledgers.

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Reader Interactions


  1. Abdur rehman says

    It is very helpful site. Thanks a lot to developer.

    • Dheeraj Vaidya says

      Thanks for your kind words!

  2. Vaibhav says


    • Dheeraj Vaidya says

      Thanks for your kind words!

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