Question

Which of the following is the best way to hide theft of assets?

A. Creating "cash" through the transfer of money between banks
B. Conversion of stolen assets into cash
C. Stealing cash from customer A and then using customer B's balance to pay customer A's accounts receivable
D. Charging the stolen asset to an expense account

Answer 1

The correct answer is letter "D": Charging the stolen asset to an expense account.

Step-by-step explanation:

An asset misappropriation takes place when individuals take advantage of the job position they have in order to profit from fraudulent activities. The fraud could be caused by any employee within a given organization, from high executives to any of their subordinates.

In the case, option "D" is a good example of asset misappropriation since it is being charged to an expense account a good that was stolen when that kind of account is only useful to report work-related expenses.