Which statement is TRUE?

Which statement is TRUE?

• A. Both cash larceny and skimming are equally difficult to detect.
• B. Cash larceny schemes are generally more difficult to detect than skimming schemes.
• C. Skimming schemes are generally more difficult to detect than cash larceny schemes.
• D. Cash distraction is the most difficult type of cash receipts scheme to detect.

Answer: (C)

Skimming is generally more difficult to detect because cash is taken before it is recorded. Since the money never enters the accounting records, there’s no straightforward trail in the books to tie to sales, so detection relies on indirect signs like revenue understatements, unusual cash counts, or mismatches between daily receipts and recorded revenue. Cash larceny, on the other hand, happens after receipts are recorded, so there’s often a tangible trail in bank reconciliations and cash balances to investigate when deposits don’t match posted receipts. That makes skimming the harder type to uncover, so the statement is true. The other options misstate the relative detectability or introduce a category not typically cited as the hardest to detect.

Skimming is generally more difficult to detect because cash is taken before it is recorded. Since the money never enters the accounting records, there’s no straightforward trail in the books to tie to sales, so detection relies on indirect signs like revenue understatements, unusual cash counts, or mismatches between daily receipts and recorded revenue. Cash larceny, on the other hand, happens after receipts are recorded, so there’s often a tangible trail in bank reconciliations and cash balances to investigate when deposits don’t match posted receipts. That makes skimming the harder type to uncover, so the statement is true. The other options misstate the relative detectability or introduce a category not typically cited as the hardest to detect.