Question

Lapping is best described as the process of________.

a. inflating bank balances by transferring money among different bank accounts.
b. applying cash receipts to a different customer's account in an attempt to conceal previous thefts of cash receipts.
c. stealing small amounts of cash, many times over a period of time.
d. increasing expenses to conceal that an asset was stolen.

Answer 1

b. applying cash receipts to a different customer's account in an attempt to conceal previous thefts of cash receipts is the correct answer.

Step-by-step explanation:

• Lapping is best described as the process of applying cash receipts to a different customer's account in an attempt to conceal previous thefts of cash receipts.

• Lapping is an illegal mode of allotting one consumer's cash to another consumer's account.

• Lapping usually occurs in smaller businesses where a single person manages payment receipts and consumer billing.

• Companies can stop and check lapping through conducting regular inspections of payment receipts and also by dividing cashier and billing tasks.