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berry0331
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Joined: 04 Sep 2011
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Posts: 49
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| Posted: 17 Aug 2012 at 22:05 | IP Logged
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Becker says that one of the best methods to detect lapping is to compare the
dollar amounts and dates on the bank deposit slips with customer
remittance credits recorded in the A/R ledger. I am not sure how it
works..can anyone explain this? Thanks in advance!!!
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ValerieL
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Joined: 25 Mar 2012
Location: United States
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| Posted: 20 Aug 2012 at 22:24 | IP Logged
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Here is how lapping works:
McDonalds pays you $100. You are the bookkeeper and
steal the $100 instead of recording the transaction. 30
days from now McDonalds is now 30 days past due. This
could signal automatic late notices to McDonalds who
would then call and complain which could reveal the
theft. To keep this from happening you take $100 that
you just received from Wendys and apply it to McDonalds
account. You have to keep doing this every month so that
none of the accounts that you took from to pay the other
end up more than 30 days past due.
The way I interpret the comparison is that the exact
dollar amount may not match the bank deposit and the
remittance credit. For example if Wendys actually paid
$150 then you would see $150 on the bank deposit slip but
only $50 in the AR ledger for Wendys because you recorded
$100 of it in McDonald's AR ledger.
The dates can also indicate lapping. If Wendys pays $100
and it shows as a deposit in the bank in February but you
do not record the deposit in the AR ledger until March
the auditor will become suspicious of the time
difference.
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berry0331
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Posts: 49
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| Posted: 21 Aug 2012 at 16:11 | IP Logged
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Got it! Thanks for the reply!!! :)
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Topic: Question on Lapping
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