The major differences between the general ledger and sub-ledger are as follows −General ledgerMaster account in which accounting transactions are recorded.Account receivables account payable, cash management, bank management and fixed asset.Have different characteristics for different transactions.One ledger account.Data volume is limited.Have a chart of accounts.Controls sub-ledger.Trail balance prepared.Sub ledgerIntermediate set of accounts linked to the general ledger.Customer accounts, vendor accounts, bank accounts and fixed assets.All transactions have the same characteristics.Can have multiple sub-ledger accounts.Data volume is large.Don’t have charts of accounts.Part of the general ledger.Trail balance is not prepared.Read More

The major differences between general journal and general ledger are as follows −General journalAll financial transactions are recorded.Subsidiary book.The primary step to record before ledger.The process of recording transactions are called journalizing.Narration is compulsory.No need of balancing.It has simple format.Recorded as per transaction date.Debit and credit recorded in column-wise.Follow concept of duality.General ledgerAll financial transactions are recorded in the respective accounts.Principal book.Second step and created from general journal.Process of transferring the entries is called posting.Narration is not compulsory.Require balances.T- Format.Entries recorded account wise.Debit and credit are recorded at different sides.Follows concept of duality.Read More

The major differences between a cash account and cash book are as follows −Cash accountCash bookIt is an account in a ledger.Transactions are made from journals.Serves the purpose of a ledger.Dependent on journal daybook.One type of cash account.Represents only cash balances.Journal folio.Cash transactions are recorded in the journal and then posted in a cash account.Don’t have any narrations.It is a separate book.Transactions are recorded directly.Serves as both journal and ledger.Independent of other books.Three types of cash books.Cash balances, bank balances, discount allowed, discount received.Ledger folio.Transactions are recorded directly.It has narration.Read More

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