The defalcation process that postpones entries for the collection of accounts receivable to conceal an existing cash shortage is referred to as
A)kiting.
B)lapping.
C)computer fraud.
D)financial statement fraud.

Question

Quizplus · Accepted Answer

The process described in the question is known as lapping. Lapping involves delaying the recording of payments received from customers in order to cover up the theft of funds. It is a common method used to conceal cash shortages and can result in a misstatement of a company's accounts receivable balance. Kiting is a fraudulent practice of creating artificial bank balances through the use of checks drawn on accounts with insufficient funds. Computer fraud and financial statement fraud may be related to defalcation but do not specifically refer to the process described in the question.

The Defalcation Process That Postpones Entries for the Collection of Accounts