Payroll Fundamentals 2 Test
Comprehensive Questions
(Frequently Most Tested) with
Verified Answers
The Accounting Equation - Answer: Assets = Liabilities + Owners Equity
Components of Owner's Equity - Answer: Owner's Equity = Contributed Capital + Retained Earnings
Contributed Capital - Answer: Payments in cash or assets made by owners to the company
Expanded Accounting Equation - Answer: Assets = Liabilities + Contributed Capital + Retained Earnings
Accounts in a For-Profit Organization - Answer: - Asset accounts
- Liability accounts
- Revenue accounts
- Expense accounts
- Owners' Equity accounts
Definition of Asset Accounts - Answer: Contains the value of items owned by the organization
Definition of Liability Accounts - Answer: Indicates the money owed by the organization to its creditors
Examples of Asset Accounts - Answer: - Cash
- Accounts receivable
- Prepaid expenses
- Inventory
, Examples of Liability Accounts - Answer: - Accounts payable
- Salaries and wages payable
- Vacation pay payable
Purpose of Revenue Accounts - Answer: Used to record the income earned by the organization
Expense Accounts - Answer: Costs incurred in earning revenue during a specific period
Equity Accounts - Answer: Show owners' or shareholders' worth in the organization
Owners' Equity Components - Answer: Contributed capital & retained earnings
General Ledger Accounts Elements - Answer: - Account name
- Opening balance
- Reference
- Debit and credit transactions
- Closing balance
Components of a Journal Entry - Answer: - Journal entry reference or number
- Transaction date
- Debit and credit amounts per account
- Total debit and credit entries
- Brief transaction explanation
Double-Entry Accounting - Answer: Each transaction affects at least two accounts with one debit and
one credit
Income Statement - Answer: Presents revenue, expenses, and net profit or loss during a specific period
Comprehensive Questions
(Frequently Most Tested) with
Verified Answers
The Accounting Equation - Answer: Assets = Liabilities + Owners Equity
Components of Owner's Equity - Answer: Owner's Equity = Contributed Capital + Retained Earnings
Contributed Capital - Answer: Payments in cash or assets made by owners to the company
Expanded Accounting Equation - Answer: Assets = Liabilities + Contributed Capital + Retained Earnings
Accounts in a For-Profit Organization - Answer: - Asset accounts
- Liability accounts
- Revenue accounts
- Expense accounts
- Owners' Equity accounts
Definition of Asset Accounts - Answer: Contains the value of items owned by the organization
Definition of Liability Accounts - Answer: Indicates the money owed by the organization to its creditors
Examples of Asset Accounts - Answer: - Cash
- Accounts receivable
- Prepaid expenses
- Inventory
, Examples of Liability Accounts - Answer: - Accounts payable
- Salaries and wages payable
- Vacation pay payable
Purpose of Revenue Accounts - Answer: Used to record the income earned by the organization
Expense Accounts - Answer: Costs incurred in earning revenue during a specific period
Equity Accounts - Answer: Show owners' or shareholders' worth in the organization
Owners' Equity Components - Answer: Contributed capital & retained earnings
General Ledger Accounts Elements - Answer: - Account name
- Opening balance
- Reference
- Debit and credit transactions
- Closing balance
Components of a Journal Entry - Answer: - Journal entry reference or number
- Transaction date
- Debit and credit amounts per account
- Total debit and credit entries
- Brief transaction explanation
Double-Entry Accounting - Answer: Each transaction affects at least two accounts with one debit and
one credit
Income Statement - Answer: Presents revenue, expenses, and net profit or loss during a specific period
