Payroll Fundamentals 2 Questions and Answers Updated 2026

Payroll Fundamentals 2 Questions
and Answers Updated 2026
TheMaccountingMequationMstates:M-MAnswerMAssetsM=MLiabilitiesM+MOwnersMEquity



Owner'sMEquityMhasMtwoMcomponents:M-
MAnswerMOwner'sMEquityM=MContributedMCapitalM+MRetainedMEarnings



ContributedMCapitalM-
MAnswerMTheMamountMofMpaymentsMinMcashMorMassetsMthatMtheMownersMhaveMmade
MtoMtheMcompany



TheMaccountingMequationMcanMbeMexpandedMto:M-
MAnswerMAssetsM=MLiabiltiesM+MContributedMCapitalM+MRetainedMEarnings



TheM5MdifferentMaccountsMofMaMtypicalMfor-profitMorganizationM-MAnswerM-
MassetMaccounts

-MliabilityMaccounts

-MrevenueMaccounts

-MexpenseMaccounts

-Mowners'MequityMaccounts



AssetMaccountsM-MAnswerMContainsMtheMvalueMofMitemsMownedMbyMtheMorganization



LiabilityMaccountsM-
MAnswerMIndicatesMtheMmoneyMthatMtheMorganizationMowesMtoMitsMcreditors



AssetMaccountsMinclude:M-MAnswerM-MCash

-MAccountsMreceivable

-MprepaidMexpenses

-Minventory



LiabilityMaccountsMincludeM-MAnswerM-MaccountsMpayable

-MsalariesMandMwagesMpayable

, -MvacationMpayMpayable



RevenueMaccountsM-
MAnswerMUsedMtoMrecordMtheMincomeMearnedMbyMtheMorganizationMduringMtheMaccou
ntingMcycle



ExpenseMaccountsM-
MAnswerMCostsMincurredMbyManMorganizationMinMtheMprocessMofMearningMrevenueMduri
ngMaMdesignatedMperiodMofMtime



EquityMaccountsM-
MAnswerMAccountsMthatMshowMtheMowners'MorMshareholders'MworthMorMinterestMinMth
eMorganization



Owners'MequityMisMdividedMinto:M-MAnswerMContributedMcapitalM&MretainedMearnings



GeneralMledgerMaccountsMconsistsMofMtheMfollowingMfiveMelements:M-MAnswerM-
MaccountMname

-MopeningMbalance

-Mreference

-MdebitMandMcreditMtransactions

-MclosingMbalance



EachMjournalMentryMmustMcontainMtheMfollowingMcomponents:M-MAnswerM-
MAMjournalMentryMreferenceMorMnumber

-MtheMdateMofMtheMtransaction

-MtheMdebitMandMcreditMamountsMtoMbeMappliedMtoMeachMaccount

-MaMtotalMofMtheMdebitMentriesMandMofMtheMcreditMentries

-MaMbriefMexplanationMofMtheMtransaction



double-entryMaccountingM-
MAnswerMAccountingMsystemMinMwhichMeachMtransactionMaffectsMatMleastMtwoMaccount
sMandMhasMatMleastMoneMdebitMandMoneMcredit