Certified Fraud Examiner Practice

In the context of fraud, a false accounting entry is typically characterized by the manipulation of financial records to misrepresent a company's financial position or performance. The act of debiting the general ledger and crediting one's own account constitutes a false accounting entry because it involves diverting company funds for personal gain. This action is deceptive and violates accounting principles, as it distorts the true financial state of the organization.

By recording a debit in the general ledger while simultaneously crediting a personal account, the perpetrator is falsely portraying a legitimate transaction while actually benefiting personally. This manipulation not only affects the integrity of financial statements but also undermines trust in the financial reporting process.

Other options, while they may involve accounting entries, do not inherently involve deception or personal gain. For example, merely allocating funds to various departments may be legitimate budgeting activity, and crediting the general ledger while debiting another account involves normal accounting practices. Creating journal entries with exaggerated figures could reflect improper accounting but does not specifically address the aspect of direct personal financial gain as does the correct option.