Denzel Jones is the major stockholder of Crystal Cleaning Company. Recently, Denzel received $10,000 of dividends from Crystal Cleaning. After receiving the dividends, he contributed $6,000, in his name, to Habitat for Humanity. The contribution of $6,000 should be recorded on the accounting records of which of the following entities?

Question

Quizplus · Accepted Answer

The contribution of $6,000 was made by Denzel Jones in his personal capacity, and therefore should be recorded in his personal records. It is not related to the operations of Crystal Cleaning Company, so it should not be recorded in the company's accounting records. The contribution should only be recorded on the accounting records of Habitat for Humanity, the recipient of the donation. Therefore, only Denzel Jones' personal records and Habitat for Humanity's accounting records are affected by this transaction.

Denzel Jones Is the Major Stockholder of Crystal Cleaning Company