Which of the following best describes a fraudulent scheme to overstate cash assets at year-end by recording deposits in transit in both the account from which the cash is withdrawn and the account to which it is transferred?
A)Lapping of cash.
B)Kiting of cash.
C)Embezzlement of cash.
D)Restrictive endorsements of cash.

Question

Quizplus · Accepted Answer

This fraudulent scheme is known as kiting of cash, where the fraudster records deposits in transit in both accounts to make the balance appear higher than it actually is. The deposits are generally not legitimate and are reversed soon after the year-end to cover up the fraud. Lapping of cash involves stealing receipts to cover up earlier thefts, embezzlement of cash involves taking cash for personal use, and restrictive endorsements of cash refer to endorsements that limit the negotiability of the instrument.

Which of the Following Best Describes a Fraudulent Scheme to Overstate