Question

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) Karen Meyer's personal records
b) Crystal Cleaning
c) American Red Cross

Answer 1

Answer:

a) Karen Meyer's personal records

c) American Red Cross

Explanation:

Crystal cleaning has no concers of the money once it is withdrew.

Now the contribution will be in Karen records. She may use it for tax benefit or just to have an archive of whis espending. Either way if she keeps accounting for his own money, then it will be recorded.

Also the American Red Cross will record the cash received along with other donations.