What is the technique of applying payments from one customer to another potentially used to conceal receivables skimming called?

The technique of applying payments from one customer to another, used to conceal receivables skimming, is known as lapping. This fraudulent scheme occurs when an employee misappropriates cash payments made by customers and then covers up the theft by applying subsequent customer payments to the accounts that were originally credited to the embezzler's theft. This creates an illusion that the accounts are in good standing, even as the individual has diverted funds for personal gain.

In the context of lapping, as one customer’s payment is misapplied to another customer's account, it leads to a continuous cycle of misrepresentation and concealment, making it challenging for the company to detect discrepancies in accounts receivable. This scheme relies on the time lapse between the original theft and the covering up of that theft with future payments, which often goes unnoticed for an extended period by management.

Other techniques mentioned, such as altered payee designation, currency substitution, and inventory padding, do not fit this specific scenario of misapplying customer payments to mask skimming. Altered payee designation refers to changing the payee on a check to divert funds. Currency substitution involves replacing cash with another type of currency or substitute that is not accounted for. Inventory padding typically deals with over