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 Financial Analysis | K



A fraudulent practice where cash receipts are not matched with their corresponding receivables in order to hide fictitious receivables. For instance, if a fictitious receivable is recorded for one customer, a firm may use a payment received from a second customer to show that the receivable item was valid. A later payment received from a third customer may be used to write off the receivable recorder by the second customer, and so on.   

This practice is also referred to as lapping.

See also:   Window Dressing, Cooking The Books, Round-Tripping