ExpertMedium1 markMultiple Choice
ACCA · Question 39 · Syllabus C: Business functions, regulation and technology
Section A
An accounts receivable clerk steals a cash payment from Customer A. To hide the theft, the clerk applies a later payment from Customer B to Customer A's account. This process is repeated continuously. What is the specific term for this type of fraud?
Section A
An accounts receivable clerk steals a cash payment from Customer A. To hide the theft, the clerk applies a later payment from Customer B to Customer A's account. This process is repeated continuously. What is the specific term for this type of fraud?
Answer options:
A.
Phishing
B.
Teeming and lading
C.
Window dressing
How to approach this question
Recognize the pattern of using subsequent receipts to cover prior thefts. This is a classic accounting fraud known as teeming and lading.
Full Answer
B.Teeming and lading✓ Correct
Teeming and lading (also known as lapping) is a fraudulent practice where a cash shortage is concealed by delaying the recording of cash receipts. Payment from Customer B is used to cover the stolen payment from Customer A, and so on.
Common mistakes
Confusing this specific cash fraud with general terms like embezzlement or window dressing.
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