Anderson embezzled $20,000 from her company's account in Bank X.At year-end,she hid the shortage by making a deposit on December 31 in Bank X,drawn on Bank Y.She has not recorded the transaction on the books.This is an example of:

Question

Quizplus · Accepted Answer

This is an example of kiting, which involves artificially inflating the balance in a bank account by recording deposits made from other accounts that do not have sufficient funds. In this case, Anderson has made a deposit on December 31 in Bank X, drawn on Bank Y, which will not be honored due to insufficient funds in Bank Y. By doing this, she has temporarily concealed the embezzlement from the company's books.

Anderson Embezzled $20,000 from Her Company's Account in Bank X