[forever4]

Well, I can’t seem to understand clearly about kiting regardless :((. If anyone can help me, it would b awesome. I know it happens when someone make deposit without recording it. But when it applies to deposit and receipt dates, i always get super confused 🙁

FAR 5/14 88 PASSED!
REG 7/13 74 :((((((((....! I cant believe it!!!! I studied so hard...
REG retake 11/29 -> 89!!!!!!!!!!!!!!!!!!!
BEC 10/11/12 -> 84!!!!!!!!!!!!!
AUD 10/25/12 -> 95!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

I'm DONE! OMG 8 months of hard work.

I SHALL PASS. BECAUSE IT'S ME, SO EVERYTHING WILL BE OK!

[RARCPA]

I always look at the dates that the company recorded in their books. In perfect and real life the cash disbursement from one account should be posted to the other account the same day. Here is a real life adjusting (or transfer) entry:

CR Bank 1 – $10,000 – (Take money out of Bank 1)

DR Bank 2 – $10,000 – (Put money in Bank 2)

Kiting occurs when the company records the deposit to Bank 2 (DR Bank 2) on or before the year end, which is usually 12/31/20XX, but records disbursement (CR Bank 1) after the year, some time in the beg of January. What they are trying to do is increase their cash by showing additional $10,000 in two places. Therefore, I would look at the transfer schedules and point out the deposits and disbursements that were not recorded in the same year.

I hope this helps…..

FAR 7/10/2012 - 93
AUD 08/28/2012 - 93
REG 10/16/2012 - 93
BEC 11/26/2012 - 88
ETHICS 12/01/2012 - 93
Done!!!!!!!!

[MrsB]

Kiting means that a company shows money in two bank accounts that only really exists in one.

Here is an example

December 31 Bank A Disbursement

December 31Book A Disbursement

January 5 Bank B Receipt

December 31 Book B Receipt

Here you can see that the above transfer is a deposit in transit. You know this because you transferred money from the bank on December 31st and recorded the disbursement and receipt of funds at the same time. It does not matter that the Bank B Receipt is later than the other dates because banks often have lags in recording transactions. The key is to make sure that the Book A Disbursement date is the earliest date out of the four listed.

Here is an example of Kiting:

December 31 Bank A Disbursement

January 10 Book A Disbursement

January 5 Bank B Receipt

December 31 Book B Receipt

Here you can see that you recorded the money going out of the books in January but you recorded that same money coming into the books in December, so you are showing the same money in your books twice. The key to kiting is to look for the date received per books and compare it to the date disbursed per books. If you received it before you disbursed it then it is kiting.

Does this make sense?

F 80
A 86
B October
R November

[forever4]

Thanks!!! Make a little bit more sense to me. I'll try to redo the sim in Wiley and see!!!

FAR 5/14 88 PASSED!
REG 7/13 74 :((((((((....! I cant believe it!!!! I studied so hard...
REG retake 11/29 -> 89!!!!!!!!!!!!!!!!!!!
BEC 10/11/12 -> 84!!!!!!!!!!!!!
AUD 10/25/12 -> 95!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

I'm DONE! OMG 8 months of hard work.

I SHALL PASS. BECAUSE IT'S ME, SO EVERYTHING WILL BE OK!

[Author]

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