[lbi18]

Okay, so in going over AUD 4, I got a little confused by kiting. I think I have an understanding now, but someone please tell me if I am wrong.

Kiting occurs when the cash receipt date per the bank is BEFORE the disbursement date per the books (i.e. the cash receipt date per the bank is in Year 1 and the disbursement date per books is recorded in Year 2) That is what my understanding of kiting seems to be and it makes sense, so I was hoping someone can confirm this.

Thanks!

FAR - 85
AUD - 99
REG - 85
BEC - 10/4/13 (Waiting)

Using Becker Self-Study

[lbi18]

Or, is kiting when the receipt date per the receiving bank is before the disbursement date per the disbursing bank?

FAR - 85
AUD - 99
REG - 85
BEC - 10/4/13 (Waiting)

Using Becker Self-Study

[Anonymous]

Ha – I was just doing MCQs on Kiting….

One example:

Check kiting occurs when cash is fraudulently created through the transfer of money between banks. Insufficient funds checks are written and deposited among a series of banks and the float is used to “create” cash.

Another example:

Kiting occurs when transfers are made from one bank account to another, but the disbursing and receiving transactions are not recorded in the same time period.

It looks like it's a bank to bank thing (not really book related), and fraud occurs with the timing between disbursing and receiving money transactions – i.e., Check numbers 202 indicates Kiting because it reveals a deposit recorded in a period (Dec 31) different from the disbursement (Jan 2).

You are correct about: “Is kiting when the receipt date per the receiving bank is before the disbursement date per the disbursing bank?”

Maybe someone else can confirm?

[Anonymous]

@future CFO – That is exactly what kiting is! This is why we audit the cash transfer schedule.

[jasonrobbins]

I'm so confused to how to read and interpret the bank transfer schedule…I ALWAYS get those questions wrong…can anyone help??? I'll give tons and tons of karma to you 😀

AUD- 97 1x
REG- 81 1x
BEC- 79 1x
FAR- 88 1x

DONE!

10/1/12 to 2/28/14

[SeattleAccountant]

All another71 posts that include kiting issue:

https://www.another71.com/cpa-exam-forum/search.php?q=kiting

Becker Class of Jan - Aug 2013: FARB DONE!!!!
CPA license pending 🙂

[Author]

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