(a) Explain the difference between Trial Balance and Balance Sheet.

(b) What is meant by ‘Operating Leverage’ and ‘Financial Leverage’?

(a)

table-bordered"> Basis Trial Balance Balance Sheet Meaning Trial Balance is a statement which accounts all the balances of the Personal account, Real account and Nominal account regardless of either Revenue or Capital A/c A Balance Sheet is a statement which shows the liabilities, assets and shareholder’s equity of the enterprise. This statement comprises of 2 major heads in which it is categorised: One is assets, which is classified into Non – Current Assets and Current assets Stock Opening stock is contemplated Closing stock is contemplated Division Debit and Credit Assets and Liabilities Part of Financial Statement No Yes Balance Nominal, Real and Personal account are shown Real and personal account are shown Objectives To monitor the arithmetical accuracy is documenting and posting the data To determine the financial position of the enterprise on a specific date Use Internal use External use Preparation During the closure of each month, quarter, half-year or financial _____ _______ _________ _______ ___ ______ ________ ____.
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