QUESTION 3 15 MARKS Using the definition and recognition cri

QUESTION 3 (15 MARKS) Using the definition and recognition criteria of the Conceptual Framework of Accounting, explain how Fremantle Ltd account for the loss of $6,000 cash stolen overnight from its safe. State the journal entry required to record the transaction

Solution

Cash embezzlement a/c          Dr.        6000

         To Cash                                            6000

Profit/Loss (Income Summary )a/c       Dr. 6000

        To Cash Embezzlement                       6000