Which Fraud Scheme Involves Stealing Customer Receipts and Applying Subsequent

question 74

Multiple Choice

Which fraud scheme involves stealing customer receipts and applying subsequent customer cash payments to cover the theft?

• A)kiting
• B)laundering
• C)lapping
• D)bogus expense

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Definitions:

Allowance for Doubtful Accounts

A contra-asset account used to estimate the portion of accounts receivable that is expected not to be collected.

Bad Debts Expense

The cost associated with accounts receivable that a company is unable to collect, recognized as an expense.

Aging Analysis

An accounting process that categorizes accounts receivable based on the length of time an invoice has been outstanding.

Bad Debts

Accounts receivable that a company determines it will not be able to collect.