In the Deep Pockets case, the illegal practice described relates to which term?

• A. Tax evasion
• B. Skimming
• C. Embezzlement
• D. Money laundering

Answer: (B)

Skimming means taking cash receipts before they are recorded in the books. In the Deep Pockets case, this is the illegal practice described: an employee secretly pockets a portion of daily cash receipts rather than depositing or recording them, so the business appears to have more cash and higher sales than it actually does. This type of theft happens at the point of sale, before the money ever gets entered into the accounting system, which is why it’s distinct from other crimes.

Why this fits best: other options involve different schemes. Tax evasion is about hiding income or falsifying tax returns to dodge taxes. Money laundering involves disguising the origins of illicit funds through transactions. Embezzlement is misappropriating funds that have already been recorded and are under someone’s control within the organization. Skimming specifically targets the cash handled at the front end and before it reaches the books, which matches the scenario described in the case.