If your iPad 2 is running iOS 7.0 or above, there's a chance that you activated the iCloud activation lock to prevent a thief from being able to reset and use your device as his or her own. Having said that, and if you have an iCloud account, login to the iCloud website with your computer, select the Find my iPhone option and then when or if iCloud detects your iPad 2, select to remotely erase it. That will restore it back to its native state as well as "deregister" it from your account, so to speak. Afterwards, your daughter can enter her own credentials and use it as she sees fit.
If you know for certain that you do not have the iCloud activation lock enabled and/or do not have an iCloud account configured with the device, then yes, you should be able to just go to Setting - General - Reset, and then select "Erase All Contents and Settings".