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Econ 118 HW2 - Econ 118 Chapter 2 Review Questions 1...

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Econ 118 Chapter 2 Review Questions 1. Skimming is defined as the theft of cash prior to its entry into the accounting system. 2. The two principal categories of skimming are cash schemes and non-cash schemes. Cash schemes are more common that non-cash schemes, but they tend to have a lower median cost. 3. a 4. Checks received through the mail are typically stolen when employees in the mail room take the incoming checks instead of processing them. Because this task is reliant on a single person, it makes it all too easy for that single person to defraud this mail check system. 5. Understated sales schemes differ from unrecorded sales in that the transaction is actually posted in the books, but for a lower amount that the perpetrator collected from the customer. This way, an employee can skim the difference between the actual amount of revenue and the amount reflected on the fraudulent recipt. 6. The cash register is manipulated to conceal skimming by ringing up a “no sale” or other non-cash transaction on their cash register to mark the theft of sales.
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