Which term is used to describe the misappropriation of company assets?

• A. Theft of operation property
• B. Embezzlement
• C. Fraud
• D. Larceny

Answer: (A)

Embezzlement is the misappropriation of company assets by someone who has been entrusted with those assets. The key element is a relationship of trust: an employee, manager, or someone with lawful access to cash, inventory, or funds who diverts those assets for personal use or hides the loss. In hospitality, this might look like skimming cash from the register, diverting inventory for personal use, or falsifying records to conceal the theft.

The other terms don’t fit as precisely. Larceny refers to taking property without permission, without the required trusted relationship and control over the asset. Fraud involves deception to obtain assets but doesn’t necessarily emphasize the misappropriation of assets in the holder’s hands. “Theft of operation property” isn’t a standard term in this context. Therefore, the correct term that captures the act of unlawfully diverting assets while in a position of trust is embezzlement.