Based on the trial balance spreadsheet below, which of the following statements is true?| Account | Debit (\() | Credit (\)) ||-------------------|-----------|------------|| Cash | 5,000 | || Accounts Payable | | 2,000 || Service Revenue | | 3,000 || Salaries Expense | 1,000 | || Common Stock | | 1,000 |A. The total debits equal the total credits.B. The trial balance is out of balance by \$1,000.C. The total credits exceed the total debits by \$2,000.D. The trial balance is out of balance by \$500.

• A. D. The trial balance is out of balance by \$500.
• B. B. The trial balance is out of balance by \$1,000.
• C. A. The total debits equal the total credits.
• D. C. The total credits exceed the total debits by \$2,000.

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the purpose of a trial balance. A trial balance is a tool used to ensure that the total debits equal the total credits in a company's accounting records. If they do not match, it indicates an error in the accounting process.
2. Step 2: Identify the debit and credit columns in the trial balance provided. The debit column includes Cash (\$5,000) and Salaries Expense (\$1,000), while the credit column includes Accounts Payable (\$2,000), Service Revenue (\$3,000), and Common Stock (\$1,000).
3. Step 3: Calculate the total debits by summing the values in the debit column. Use the formula: $\mathrm{Total}=5000+1000$. This gives the total debits.
4. Step 4: Calculate the total credits by summing the values in the credit column. Use the formula: $\mathrm{Total}=2000+3000+1000$. This gives the total credits.
5. Step 5: Compare the total debits and total credits. If the totals are not equal, calculate the difference between the two using the formula: $\mathrm{Difference}=\mathrm{Total}\mathrm{Debits}-\mathrm{Total}\mathrm{Credits}$. This will help determine whether the trial balance is out of balance and by how much.