Question

Which of the following term describes the concealment of shortage by delaying the recording of cash receipts?

A Embezzlement Correct Answer Incorrect Answer
B Misappropriation Correct Answer Incorrect Answer
C Lapping Correct Answer Incorrect Answer
D Error of commission Correct Answer Incorrect Answer
E None of these Correct Answer Incorrect Answer

Solution

Lapping is a type of fraud which occurs  when an employee alters accounts receivable records in order to hide the theft of cash . This is done by diverting a payment from one customer, and then hiding the theft by diverting cash from another customer to offset the receivable from the first customer.

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