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

Rhea Kayla Ramirez · Accepted Answer

Final Answer : B, Explanation :  The contribution of $6,000 to the American Red Cross should be recorded on Karen Meyer's personal records because she made the donation from her personal funds after withdrawing the money from Crystal Cleaning. It should also be recorded on the records of the American Red Cross as they are the recipient of the donation. Crystal Cleaning's records would only reflect the withdrawal of the $10,000 by Meyer, not the subsequent donation to the American Red Cross.

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