LAPPING

Lapping as per Becker text book, involves withholding current receipts of cash or checks and not recording them. The unrecorded receipt is covered by applying a subsequent receipt to the previously unrecorded account.

In simple language,it's cash theft. A debtor of the company deposits $100, which is not recorded, but is misappropriated by the employee, and that shortage is covered with receipts from another customer.Any balance appearing in the 1dt debtor's account( the amount debtor has paid but is not recorded and is stolen) is usually WRITTEN OFF.