Cash theft schemes fall into two categories: skimming and cash larceny. Which statement correctly describes these categories?

• A. Skimming is theft of cash that has already appeared on the books.
• B. Cash larceny occurs before cash is recorded.
• C. Skimming and cash larceny are not related to timing.
• D. Cash larceny is the theft of cash that has already appeared on the books.

Answer: (D)

The key idea is timing: skimming and cash larceny differ by when the cash is stolen relative to the recording in the books. Skimming happens before the cash is recorded, so the theft occurs before any entry shows up in the accounts. Cash larceny, on the other hand, happens after the cash has already appeared in the records—cash is taken that has been recorded, such as cash taken from a cash register or from receipts after they’ve been posted. Because of that timing, the statement that describes cash larceny as the theft of cash that has already appeared on the books is the correct one. The other statements mix up when the theft occurs or claim timing isn’t relevant, which doesn’t fit how these categories are defined.