Which of the following is an example of inflating cash payments? (a) Making payments against purchase vouchers. (b) Teeming and lading. (c) Not accounting for cash sales fully. (d) Making payments against in fiated vouchers.
Question
Which of the following is an example of inflating cash payments? (a) Making payments against purchase vouchers. (b) Teeming and lading. (c) Not accounting for cash sales fully. (d) Making payments against in fiated vouchers.
Solution
The example of inflating cash payments among the options given is (d) Making payments against inflated vouchers.
Here's why:
(a) Making payments against purchase vouchers is a standard business practice and does not necessarily involve inflating cash payments.
(b) Teeming and lading, also known as lapping, is a form of fraud involving the manipulation of accounts receivable, but it does not directly relate to inflating cash payments.
(c) Not accounting for cash sales fully is a form of under-reporting income, not inflating cash payments.
(d) Making payments against inflated vouchers involves paying more than the actual value of the goods or services received, which is a direct example of inflating cash payments.
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