Payroll Fundamentals 2 Exam
Questions and Answers 100% Pass
The accounting equation states: - ✔✔Assets = Liabilities + Owners Equity
Owner's Equity has two components: - ✔✔Owner's Equity = Contributed Capital +
Retained Earnings
Contributed Capital - ✔✔The amount of payments in cash or assets that the owners
have made to the company
The accounting equation can be expanded to: - ✔✔Assets = Liabilties + Contributed
Capital + Retained Earnings
The 5 different accounts of a typical for-profit organization - ✔✔- asset accounts
- liability accounts
- revenue accounts
- expense accounts
- owners' equity accounts
Asset accounts - ✔✔Contains the value of items owned by the organization
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, Liability accounts - ✔✔Indicates the money that the organization owes to its creditors
Asset accounts include: - ✔✔- Cash
- Accounts receivable
- prepaid expenses
- inventory
Liability accounts include - ✔✔- accounts payable
- salaries and wages payable
- vacation pay payable
Revenue accounts - ✔✔Used to record the income earned by the organization during
the accounting cycle
Expense accounts - ✔✔Costs incurred by an organization in the process of earning
revenue during a designated period of time
Equity accounts - ✔✔Accounts that show the owners' or shareholders' worth or interest
in the organization
Owners' equity is divided into: - ✔✔Contributed capital & retained earnings
General ledger accounts consists of the following five elements: - ✔✔- account name
- opening balance
Katelyn Whitman, All Rights Reserved © 2025 2
Questions and Answers 100% Pass
The accounting equation states: - ✔✔Assets = Liabilities + Owners Equity
Owner's Equity has two components: - ✔✔Owner's Equity = Contributed Capital +
Retained Earnings
Contributed Capital - ✔✔The amount of payments in cash or assets that the owners
have made to the company
The accounting equation can be expanded to: - ✔✔Assets = Liabilties + Contributed
Capital + Retained Earnings
The 5 different accounts of a typical for-profit organization - ✔✔- asset accounts
- liability accounts
- revenue accounts
- expense accounts
- owners' equity accounts
Asset accounts - ✔✔Contains the value of items owned by the organization
Katelyn Whitman, All Rights Reserved © 2025 1
, Liability accounts - ✔✔Indicates the money that the organization owes to its creditors
Asset accounts include: - ✔✔- Cash
- Accounts receivable
- prepaid expenses
- inventory
Liability accounts include - ✔✔- accounts payable
- salaries and wages payable
- vacation pay payable
Revenue accounts - ✔✔Used to record the income earned by the organization during
the accounting cycle
Expense accounts - ✔✔Costs incurred by an organization in the process of earning
revenue during a designated period of time
Equity accounts - ✔✔Accounts that show the owners' or shareholders' worth or interest
in the organization
Owners' equity is divided into: - ✔✔Contributed capital & retained earnings
General ledger accounts consists of the following five elements: - ✔✔- account name
- opening balance
Katelyn Whitman, All Rights Reserved © 2025 2
