Which description best characterizes skimming in fraud terms?

• A. The theft of off-book funds
• B. The theft of money that has appeared on the books
• C. A bank employee directing transfers
• D. A fictitious refund transaction

Answer: (A)

Skimming is the theft of cash before it is recorded in the accounting records—money that is off the books. That’s why this description best matches skimming: the fraud exploits funds that haven’t yet appeared in the books, leaving little trace until a reconciliation or cash count reveals the loss. If money has already been recorded, the theft is through a different route, not skimming. Similarly, directing transfers or creating fictitious refunds are forms of internal manipulation or refund fraud, not the pre-recording cash theft that defines skimming.