An accounts clerk at a charity steals a cash donation from Donor A. To cover this up, the clerk uses the next cash donation from Donor B to credit Donor A's account. This process continues, constantly using new receipts to cover previous thefts. What specific type of fraud is this?

Answer options:

Money laundering

Teeming and lading

Phishing

Window dressing

How to approach this question

Identify the specific accounting term for 'lapping' or rolling over stolen cash receipts.

Full Answer

B.Teeming and lading✓ Correct

Teeming and lading is a classic bookkeeping fraud. It involves stealing cash received from one customer and covering the shortage with cash received from another customer. It requires constant maintenance by the fraudster to keep the chain going.

Common mistakes

Confusing it with money laundering. Money laundering deals with 'dirty' money from outside; teeming and lading is internal theft.

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