Payroll Fundamentals 2 Exam Questions and Answers Latest Update 2025 Already Passed

Payroll Fundamentals 2 Exam Questions and Answers Latest Update 2025 Already Passed The accounting equation states: - Answers Assets = Liabilities + Owners Equity Owner's Equity has two components: - Answers Owner's Equity = Contributed Capital + Retained Earnings Contributed Capital - Answers The amount of payments in cash or assets that the owners have made to the company The accounting equation can be expanded to: - Answers Assets = Liabilties + Contributed Capital + Retained Earnings The 5 different accounts of a typical for-profit organization - Answers - asset accounts - liability accounts - revenue accounts - expense accounts - owners' equity accounts Asset accounts - Answers Contains the value of items owned by the organization Liability accounts - Answers Indicates the money that the organization owes to its creditors Asset accounts include: - Answers - Cash - Accounts receivable - prepaid expenses - inventory Liability accounts include - Answers - accounts payable - salaries and wages payable - vacation pay payable Revenue accounts - Answers Used to record the income earned by the organization during the accounting cycle Expense accounts - Answers Costs incurred by an organization in the process of earning revenue during a designated period of time Equity accounts - Answers Accounts that show the owners' or shareholders' worth or interest in the organization Owners' equity is divided into: - Answers Contributed capital & retained earnings General ledger accounts consists of the following five elements: - Answers - account name - opening balance - reference - debit and credit transactions - closing balance Each journal entry must contain the following components: - Answers - A journal entry reference or number - the date of the transaction - the debit and credit amounts to be applied to each account - a total of the debit entries and of the credit entries - a brief explanation of the transaction double-entry accounting - Answers Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit Income Statement - Answers A financial statement which presents the revenue, expenses, and net profit or loss of an organization during a specific period of time The main purpose of an income statement - Answers to determine if the organization has earned a profit or incurred a loss during the period being reported Balance Sheet - Answers A financial statement which presents and summarizes the organization's assets, liabilities and owners' equity at specified point in time Salaries and wages expenses can be classified into two types: - Answers - direct labour costs - indirect labour costs Direct labour costs - Answers Payroll costs incurred to pay employees who are actually performing a particular service, work or sales activity Indirect labour costs - Answers Payroll costs incurred to pay employees who do not actually perform the particular service, work or sales activity, but perform administrative functions Statutory Requirements - Answers Expenses that organisations incur as a result of federal and provincial legislation Account reconcilation - Answers The process of proving that the general ledger balances are correct by reviewing transactions and supporting documentation, and resolving any discrepancies that are discovered Account reconciliations should involve: - Answers - a review of all transactions - matching transactions with supporting documents - investigating and resolving any discrepancies of concern Reasonableness test - Answers Requires an individual to examine the General Ledger account in detail to ensure that all postings are in balance and seem reasonable Year-over-year comparison - Answers Compare each expense account for a certain time frame to determine if there have been material changes An organization's remittance frequency depends on: - Answers Its average monthly withholding amount for the second preceding calendar year Four remitter types for source deductions - Answers - Quarterly - Regular - Accelerated threshold 1 - Accelerated threshold 2 Quarterly remitter for source deductios - Answers For new employers who have a monthly remittance of less than $1,000.00 or for employers whose average monthly withholding amount is less than $3,000.00 Regular remitter for source deductions - Answers For employers whose average monthly withholding amount is from $3,000 to $24,999.99 and for new employers who have not be