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:

Phishing

Teeming and lading

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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Practice the full ACCA BT — Business & Technology Practice Exam 4

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