Green's scheme is best classified as which type of fraud?

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Prepare for the Coach CFE Exam. Study using flashcards and multiple-choice questions, each with hints and explanations. Get ready for your assessment!

Multiple Choice

Green's scheme is best classified as which type of fraud?

Explanation:
Skimming fraud involves taking cash receipts before they are recorded in the accounting system. When cash is diverted before any sale is entered, there’s no corresponding entry for the sale in the books, so revenue remains unrecorded. That makes the best classification an unrecorded sales (skimming) scheme. If cash had already been recorded and then stolen, it would be cash larceny; a commission scheme would involve fake commissions, which isn’t the case here.

Skimming fraud involves taking cash receipts before they are recorded in the accounting system. When cash is diverted before any sale is entered, there’s no corresponding entry for the sale in the books, so revenue remains unrecorded. That makes the best classification an unrecorded sales (skimming) scheme. If cash had already been recorded and then stolen, it would be cash larceny; a commission scheme would involve fake commissions, which isn’t the case here.

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