Payroll Fundamentals 2 Exam Questions
With Correct Answers
The accounting equation states: - CORRECT ANSWER✔✔-Assets = Liabilities +
| | | | | | | | | |
Owners Equity |
Owner's Equity has two components: - CORRECT ANSWER✔✔-Owner's Equity =
| | | | | | | | | |
Contributed Capital + Retained Earnings | | | |
Contributed Capital - CORRECT ANSWER✔✔-The amount of payments in cash or
| | | | | | | | | | |
assets that the owners have made to the company
| | | | | | | |
The accounting equation can be expanded to: - CORRECT ANSWER✔✔-Assets =
| | | | | | | | | | |
Liabilties + Contributed Capital + Retained Earnings
| | | | | |
The 5 different accounts of a typical for-profit organization - CORRECT
| | | | | | | | | | |
ANSWER✔✔-- asset accounts | |
- liability accounts
| |
- revenue accounts
| |
- expense accounts
| |
- owners' equity accounts
| | |
Asset accounts - CORRECT ANSWER✔✔-Contains the value of items owned by the
| | | | | | | | | | |
organization
|
,Liability accounts - CORRECT ANSWER✔✔-Indicates the money that the
| | | | | | | | |
organization owes to its creditors | | | |
Asset accounts include: - CORRECT ANSWER✔✔-- Cash
| | | | | |
- Accounts receivable
| |
- prepaid expenses
| |
- inventory
|
Liability accounts include - CORRECT ANSWER✔✔-- accounts payable
| | | | | | |
- salaries and wages payable
| | | |
- vacation pay payable
| | |
Revenue accounts - CORRECT ANSWER✔✔-Used to record the income earned by
| | | | | | | | | | |
the organization during the accounting cycle
| | | | |
Expense accounts - CORRECT ANSWER✔✔-Costs incurred by an organization in
| | | | | | | | | |
the process of earning revenue during a designated period of time
| | | | | | | | | |
Equity accounts - CORRECT ANSWER✔✔-Accounts that show the owners' or
| | | | | | | | | |
shareholders' worth or interest in the organization
| | | | | |
Owners' equity is divided into: - CORRECT ANSWER✔✔-Contributed capital &
| | | | | | | | | |
retained earnings |
, General ledger accounts consists of the following five elements: - CORRECT
| | | | | | | | | | |
ANSWER✔✔-- account name | |
- opening balance
| |
- reference
|
- debit and credit transactions
| | | |
- closing balance
| |
Each journal entry must contain the following components: - CORRECT
| | | | | | | | | |
ANSWER✔✔-- 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 - CORRECT ANSWER✔✔-Accounting system in which
| | | | | | | |
each transaction affects at least two accounts and has at least one debit and one
| | | | | | | | | | | | | | |
credit
Income Statement - CORRECT ANSWER✔✔-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 - CORRECT ANSWER✔✔-to determine
| | | | | | | | | | |
if the organization has earned a profit or incurred a loss during the period being
| | | | | | | | | | | | | | |
reported
With Correct Answers
The accounting equation states: - CORRECT ANSWER✔✔-Assets = Liabilities +
| | | | | | | | | |
Owners Equity |
Owner's Equity has two components: - CORRECT ANSWER✔✔-Owner's Equity =
| | | | | | | | | |
Contributed Capital + Retained Earnings | | | |
Contributed Capital - CORRECT ANSWER✔✔-The amount of payments in cash or
| | | | | | | | | | |
assets that the owners have made to the company
| | | | | | | |
The accounting equation can be expanded to: - CORRECT ANSWER✔✔-Assets =
| | | | | | | | | | |
Liabilties + Contributed Capital + Retained Earnings
| | | | | |
The 5 different accounts of a typical for-profit organization - CORRECT
| | | | | | | | | | |
ANSWER✔✔-- asset accounts | |
- liability accounts
| |
- revenue accounts
| |
- expense accounts
| |
- owners' equity accounts
| | |
Asset accounts - CORRECT ANSWER✔✔-Contains the value of items owned by the
| | | | | | | | | | |
organization
|
,Liability accounts - CORRECT ANSWER✔✔-Indicates the money that the
| | | | | | | | |
organization owes to its creditors | | | |
Asset accounts include: - CORRECT ANSWER✔✔-- Cash
| | | | | |
- Accounts receivable
| |
- prepaid expenses
| |
- inventory
|
Liability accounts include - CORRECT ANSWER✔✔-- accounts payable
| | | | | | |
- salaries and wages payable
| | | |
- vacation pay payable
| | |
Revenue accounts - CORRECT ANSWER✔✔-Used to record the income earned by
| | | | | | | | | | |
the organization during the accounting cycle
| | | | |
Expense accounts - CORRECT ANSWER✔✔-Costs incurred by an organization in
| | | | | | | | | |
the process of earning revenue during a designated period of time
| | | | | | | | | |
Equity accounts - CORRECT ANSWER✔✔-Accounts that show the owners' or
| | | | | | | | | |
shareholders' worth or interest in the organization
| | | | | |
Owners' equity is divided into: - CORRECT ANSWER✔✔-Contributed capital &
| | | | | | | | | |
retained earnings |
, General ledger accounts consists of the following five elements: - CORRECT
| | | | | | | | | | |
ANSWER✔✔-- account name | |
- opening balance
| |
- reference
|
- debit and credit transactions
| | | |
- closing balance
| |
Each journal entry must contain the following components: - CORRECT
| | | | | | | | | |
ANSWER✔✔-- 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 - CORRECT ANSWER✔✔-Accounting system in which
| | | | | | | |
each transaction affects at least two accounts and has at least one debit and one
| | | | | | | | | | | | | | |
credit
Income Statement - CORRECT ANSWER✔✔-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 - CORRECT ANSWER✔✔-to determine
| | | | | | | | | | |
if the organization has earned a profit or incurred a loss during the period being
| | | | | | | | | | | | | | |
reported
