Cash Receipts #2 Flashcards
Which of the following is an example of an off-book fraud?
A. Skimming
B. Billing schemes
C. Cash larceny
D. Ghost employee schemes
A. Skimming
To help detect cash larceny, the person responsible for collecting incoming cash should also prepare the bank deposits.
A. True
B. False
False
Katie is a salesclerk at a jewelry store. She watched Helen, another salesclerk, type her access code into her register and Katie memorized it. When Helen called in sick, Katie logged in to the cash register using Helen’s code and processed customer transactions as usual. After completing one sale, she left the drawer open and slipped a large sum of money into her pocket from the register drawer. What type of scheme did she commit?
A. A skimming scheme
B. A cash larceny scheme
C. A register disbursement scheme
D. An understated sales scheme
B. A cash larceny scheme
A skimming scheme is easier to detect than a cash larceny scheme because it leaves an audit trail.
A. True
B. False
False
Reconciling the cash register total to the amount of cash in the drawer is an ineffective method of detecting a cash larceny scheme.
A. True
B. False
False
Bruce, a manager for a retail store, suspects his cashiers of skimming sales. Bruce will be able to detect this kind of scheme by comparing their register totals to the amount of money in their cash drawers.
A. True
B. False
False
Green, a door-to-door salesperson, sold several appliances to households in a neighborhood. Green took the money the customers gave him as down payments for the sales and spent it. He did not turn in the orders to his employer. Green’s scheme can BEST be classified as:
A. A commission scheme
B. An unrecorded sales (skimming) scheme
C. An understated sales (skimming) scheme
D. A cash larceny scheme
B. An unrecorded sales (skimming) scheme
Cash theft schemes fall into which of the following two categories?
A. Skimming and cash larceny
B. Skimming and unrecorded sales
C. Unrecorded sales and false discounts
D. Register manipulation and understated sales
A. Skimming and cash larceny
All of the following are measures that would be helpful in preventing cash larceny schemes EXCEPT:
A. Ensuring that the duties of making bank deposits and performing bank reconciliations are assigned to different individuals
B. Having all employees use the same cash register for their transactions
C. Assigning an employee’s duties to another individual when that employee goes on vacation
D. Sending out a company-wide communication informing employees of the company’s surprise cash-count policy
B. Having all employees use the same cash register for their transactions
Which of the following is NOT an effective control to protect against skimming schemes?
A. Reconciling the sales records to the cash receipts
B. Reconciling the physical inventory count with the perpetual inventory records
C. Installing visible video cameras to monitor a store’s cash registers
D. Restricting the accounts receivable clerk from preparing the bank deposit
A. Reconciling the sales records to the cash receipts
Darla is an accounts receivable clerk at Richmond Storage Rental. Carson, who rents one of the company’s storage units, submits his monthly payment to Richmond’s office. Instead of applying the payment to Carson’s account, Darla takes the money and keeps it for herself. The next payment that arrives comes from Fisher. Instead of applying Fisher’s payment to the correct account, Darla applies it to Carson’s account so that it does not appear delinquent. The next payment that arrives gets applied to Fisher’s account, and Darla continues to apply incoming customer payments to the previous customer’s account so that no one discovers her initial theft of Carson’s payment. What type of scheme is Darla committing?
A. Kiting
B. Padding
C. Substitution
D. Lapping
D. Lapping
The removal of cash from a victim organization before the cash is entered in the organization’s accounting system is:
A. Skimming
B. A fraudulent disbursement
C. Cash larceny
D. Lapping
A. Skimming
Which of the following statements is TRUE?
A. Cash distraction is the most difficult type of cash receipts scheme to detect.
B. Skimming schemes are generally more difficult to detect than cash larceny schemes.
C. Cash larceny schemes are generally more difficult to detect than skimming schemes.
D. Both cash larceny and skimming are equally difficult to detect.
B. Skimming schemes are generally more difficult to detect than cash larceny schemes.
The accounts receivable clerk should be responsible for preparing the bank deposit.
A. True
B. False
False
Skimming schemes can involve the theft of cash sales or the theft of accounts receivable payments.
A. True
B. False
True
Which of the following statements about detecting a cash larceny scheme is TRUE?
A. If employees who handle cash go on vacation, other employees should take over their duties
B. Someone other than the accounts receivable clerk should prepare the bank deposit
C. Reconciling the cash register total to the amount of cash in the drawer is helpful in detecting a cash larceny scheme
D. All of the above
D. All of the above
Grey, a controller for a small company, took a large sum of money from the company deposits and concealed the theft by making false accounting entries. The money that Grey stole had already been recorded in his company’s accounting system. Grey’s scheme can BEST be classified as a(n):
A. Fraudulent financial statement scheme
B. Skimming scheme
C. Illegal gratuities scheme
D. Cash larceny scheme
D. Cash larceny scheme
Which of the following would be helpful in detecting a skimming scheme?
A. Examining journal entries for accounts receivable write-offs
B. Examining journal entries for false credits to inventory
C. Confirming customers’ unpaid account balances
D. All of the above
D. All of the above
The accounts receivable clerk should be responsible for both collecting cash and disbursing company funds.
A. True
B. False
False
A ____________ scheme involves the theft of cash BEFORE it has been recorded on a company’s books, and a __________ scheme involves the theft of cash AFTER it has already appeared on the books.
A. Cash larceny; revenue
B. Skimming; cash larceny
C. Cash larceny; skimming
D. Fraudulent disbursement; skimming
B. Skimming; cash larceny
If employees are aware that surprise cash counts are conducted, then they will generally be less inclined to commit a cash larceny scheme.
A. True
B. False
True
