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Coach CFE Practice Exam

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Green's scheme is best classified as which type of fraud?
Correct Answer:
An unrecorded sales (skimming) scheme
Explanation:
Green’s scheme is about taking cash from customers before the sale is recorded, so no entry ever appears for that sale in the books. That’s the essence of an unrecorded sales (skimming) scheme—the cash is skimmed without being posted to revenue. This differs from understated sales, where the sale is recorded but for a smaller amount, and from cash larceny, where cash has already been recorded and is stolen later, and from a commission scheme, which involves falsified or inflated commissions. Skimming hides the theft by keeping the sale out of the records entirely, leading to missing revenue and missing cash without a corresponding entry.

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