Karen Meyer owns and operates Crystal Cleaning Company. Recently, Meyer withdrew $10,000 from Crystal Cleaning, and she contributed $6,000, in her name, to the American Red Cross. The contribution of the $6,000 should be recorded on the accounting records of which of the following entities?

A) Crystal Cleaning and the American Red Cross
B) Karen Meyer's personal records and the American Red Cross
C) Karen Meyer's personal records and Crystal Cleaning
D) Karen Meyer's personal records, Crystal Cleaning, and the American Red Cross

Question

Narinderpal Singh Dhillon · Accepted Answer

Final Answer : B, Explanation :  The contribution of $6,000 should be recorded on Karen Meyer's personal records because it was a personal donation, and on the American Red Cross's records as they received the donation. Crystal Cleaning's records would not reflect this transaction as it was made from Meyer's personal funds, not the business's funds.

Definitions

Learning Objectives

Learning Objectives

Related questions