The major differences between profit and loss account and trading are as follows −Profit and loss accountRepresents profit earned or loss sustained.It ascertains net profit for a period.The balance is transferred to the capital account.Operating and non-operating incomes and expenses.It is prepared after trading account.The second step in preparing final account.It is dependent on trading account.It is treated directly in the balance sheet.It discloses true and complete results of a business.Trading accountRepresent trading activities.Ascertain gross profit for a period.Balance is transferred to profit and loss account.Direct revenue and direct revenue.Prepared before the profit and loss account.Primary step in preparing final ... Read More

The major differences between profit and loss account and profit and loss appropriate account are as follows −Profit and loss accountIt is prepared by all types of businesses.It doesn’t have an opening or closing balance.It is prepared after trading account.The items debited are all expenses.Not based on the partnership agreement.The matching principle is not followed.To ascertain net profit/loss.Profit and loss appropriate accountIt is prepared mainly by partnership firms.May carry forward opening or closing balance from the previous accounting period.It is prepared after the profit and loss account.Item debited are appropriations of profit.Based on the partnership agreement.The matching principle is not ... Read More

The major differences between trail balance and adjusted trail balance are as follows −Trail balanceLedger account balance complied without any period-end adjustments.It is prepared first.It is account balances.To check the arithmetical accuracy of ledger.Checkbooks of accounts are balanced.It is less accurate.Only one version prepared.It is prepared in columnar format.Adjusted trail balanceIt is compiled after necessary adjustments are made at the close of the accounting period.It is prepared after the unadjusted trail balance is prepared.It includes necessary adjustments.To check the accounting accuracy of the books of accounts.Adjustments are made according to accounting standards and principles.It is more accurate.It can have multiple ... Read More

The major differences between trail balance and general ledger are as follows −Trail balanceIt is a statement of debit and credit balances.It is called a trail balance only.It summarises all ledger accounts.It may or may not contain suspense accounts.It can’t be analyzed details.No classification of accounts.It is prepared on final day of accounting year.General LedgerIt is account wise summary.It is also called as principle book of accounts and book of final entry.It summarises all journal entries.It consists of many pages.No suspense account.It is analysed in detail.It is prepared on class of accounts.It is prepared on transaction during accounting year.Read More

The major differences between fund flow statement and balance sheet are as follows −Fund flow statementBalance sheetDynamic in nature.No prescribed format.Helps in decision making.The need for a schedule of Change in working capital.Doesn’t deal with personal accounts.Various sources and uses of funds in a specific period.Not published.Prepared after financial accounts are completed.Prepared by management accountant.Used by top management.Static in nature.Prescribed format.To study in a financial position.No need of schedule of Change in working capital.Also, contain detail of personal accounts.Profit and loss account is the basic in preparation of the balance sheet.It is published.Prepared after preparing profit and loss accountPrepared by ... Read More

The major differences between cash flow statement and balance sheet are as follows −Cash flow statementsIt is also called a statement of cash flows.It is calculated for short periods (quarterly).International accounting standards 7 (IAS 7).Money coming into the business is termed as cash inflow.Money going out from the business is termed as cash outflow.Money from operations, investments, and other financial activities.It is used by Short term investors.It is classified into three parts.Budgeting and forecasting.It is prepared using a Profit and loss account and balance sheet.Balance sheetIt is a statement of financial position.It is calculated yearly.Generally Accepted Accounting Principle (GAAP), Federal ... Read More

The major differences between consolidate balance sheet and balance sheet are as follows −Consolidate balance sheetIn case of subsidiaries companies, assets and liabilities are not mentioned separately.It is difficult to prepare.It reflects financial position of a firm and its subsidiary.Assets (parent + subsidiary) = liabilities (parent + subsidiary) + shareholders’ equity+ minority interest.It takes lot of time to prepare.It is prepared by only companies holding shares in another company.Balance sheetIn case of subsidiaries, assets and liabilities are mentioned separately.It is easy to prepare.It shows financial position of a firm to stakeholders.Assets = liabilities + shareholders’ equity.It takes less time to ... Read More

The major differences between balance sheet and income statement are as follows −Balance sheetIncome statementAssets, liabilities and equity.Helps in deriving liquidity of a firm.Prepared in last day of accounting period.Accounts transferred are not closedBalance will become opening balance for next period.Current ratio, quick ratio, cash ratio, receivable turnover ratio, inventory turnover ratio, payable turnover ratio, return on assets are calculated.It is also named as statement of financial positionIt has narrow scope.Revenues and expenses.Helps to take decisions in any operational or financial issues.Prepared for accounting period.Accounts transferred are closed.Balance is transferred to capital account in balance sheet.Gross margin, operating margin, net ... Read More

The major differences between the trial balance and balance sheet are as follows −Trail balanceBalance sheetOpening stock is considered.Debit and credit.Doesn’t take part in financial statement.Contains nominal, real and personal accounts.Internal useCan be prepared monthly, quarterly, half-yearly and financial period.Prepared in column format.Audit is not necessary.Information of loss or profit is not provided.Not necessary to prepared by law.Prepared before adjustments.Can’t tell true financial position of the firm.General ledger is the source.No thumb rule.Closing stock is considered.Assets and liabilities.Will take part in financial statement.Contains real and personal accounts.External use.Prepared in financial period.Prepared in T-Format.Audit is necessary.Information on loss/profit is provided.Prepared by ... Read More

In today’s rapidly changing business world, it is critical for business leaders to have the right insight and data to make the right calls at the right time. Finding the right blend of what, why and how to use this enormous amount of data is something that needs attention in present day competitive business environment.Business strategies and operational decisions are being undertaken based on the analysis provided by past operational data. Hence it is tremendously important for global business entities to equip themselves with the emerging technologies like business analytics software for better decision making and forecasting.Business Decisions + Analytics ... Read More