Which term describes the act of misusing funds entrusted to you for personal use?

• A. Fraud
• B. Theft
• C. Embezzlement
• D. Larceny

Answer: (C)

Misusing funds entrusted to you for personal use is embezzlement. The key idea here is that the person had lawful access to the money because of their role or position, and then converted those funds to personal use in a way that breaches that trust. Embezzlement centers on this breach of fiduciary responsibility and the improper conversion of entrusted property.

This differs from plain theft or larceny, where the person takes property without any right to possess it in the first place. Fraud involves deceiving someone to obtain money, rather than misusing funds you were entrusted to manage. So when someone with responsibility over funds uses them for themselves, the act is embezzlement. For example, a cashier who diverts company money for personal use fits this description.