Which of the following events is not recorded in the accounting records? Entry field with incorrect answer now contains modified data Equipment is purchased on account. A cash investment is made into the business. The declaration of cash dividends. An employee is terminated.

Question

Jolie Grimes

Business

29 October, 14:37

Which of the following events is not recorded in the accounting records? Entry field with incorrect answer now contains modified data Equipment is purchased on account. A cash investment is made into the business. The declaration of cash dividends. An employee is terminated.

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Answers (1)

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Christopher Velazquez · Answer 1

An employee is terminated.

Explanation:

All the transactions, in a company or organisation are recorded in financial statements of the company.

For this each transaction having some numerical value, that has a monetary effect on the organisation is identified.

In the given case,

purchase of equipment will involve direct monetary effect as cash will be paid, asset will be increased, etc: cash investment made, will again require cash outflow, and is presented as monetary in nature. Declaration of cash dividends gives existence to a liability called dividend payable, or scrips payable, and is thus, recorded in books. The termination of employee does not itself involve any direct monetary effect. As, the payment made or realized from such termination will be recorded in financial statements.