Question

15. Donna Holbrook, an administrative assistant at Mason Enterprises, charged some office supplies to the company credit card. Several weeks later, she attached the store receipt from the purchase to an expense report and requested reimbursement from the company. This is an example of which type of expense reimbursement scheme?

Answer 1

Answer:

Multiple reimbursement scheme

Explanation:

What Donna Holbrook did is considered a case of multiple reimbursement. This means she requested the payment of the expense more than once. She first used the company credit card to buy the office supplies. This means that she didn’t use her own money because the credit card wasn’t hers. But a month after that, she used the receipt to request reimbursement from the company implying that she bought those supplies with her own money. By doing so, the company is paying twice for a purchase that was done only once. There’re also other kind of expense reimbursement schemes: fictitious expense schemes (when the expense is actually not real but made up by the employee); overstated expense schemes (when the employee inflates the expense in order to keep the extra money); and mischaracterized expense schemes (this occurs when the employee intends to get reimbursement for an expense that is personal and not related to the business).