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. Crystal Cleaning and the American Red Cross b. Karen Meyer's personal records and Crystal Cleaning c. Karen Meyer's personal records and the American Red Cross d. Karen Meyer's personal records, Crystal Cleaning, and the American Red Cross

Answer 1

Answer:

c. Karen Meyer's personal records and the American Red Cross

Explanation:

Karen owns the company and withdrew $10,000. That should be recorded on the accounting records of both Karen and Crystal Cleaning Company.

She later performs a new operation. She makes a contribution of $6,000 to the American Red Cross.

Now, this contribution, this operation should be recorded on her personal records and the American Red Cross. This sum: $6,000 doesn't come from Crystal Cleaning Company as the contribution was on her name.

So, the answer is C. Karen records and the American Red Cross.