The suggested answer (B) is the most appropriate choice.
Reasoning: Embezzlement is specifically defined as the unlawful conversion of assets already in the possession of an employee. This distinguishes it from other forms of theft or fraud.
Here's why the other options are less suitable:

A: Favors from a supplier constitute a conflict of interest or bribery, not embezzlement.
C: Misrepresentation of facts describes fraud generally, but not specifically embezzlement.
D: Stealing of material by outsiders describes theft or burglary, not embezzlement.

Based on the definition of embezzlement, option B accurately reflects its core characteristic.

The definition of embezzlement is consistent across various legal and auditing resources. For example, corporatefinanceinstitute.com defines embezzlement as: "Embezzlement is a form of white-collar crime where a person or people illegally acquire property that they are entrusted to manage or monitor."

Here's a detailed breakdown of why each option is correct or incorrect:

A. Favors from a supplier that is attempting to gain advantage when selling its products: This describes a situation involving bribery or conflict of interest. While unethical and potentially illegal, it doesn't fit the definition of embezzlement because it doesn't involve the unlawful conversion of assets already in the employee's possession.
B. Unlawful conversion of assets that are in the possession of an employee: This is the correct answer. Embezzlement specifically involves taking assets that one has been entrusted with. The key here is the element of trust and the violation of that trust through unlawful conversion.
C. Misrepresentation of material facts in order to mislead others to part with something of value: This describes fraud. While embezzlement can be a form of fraud, this definition is too broad and doesn't capture the specific element of possessing the assets beforehand.
D. Stealing of material of value by unknown persons from outside the organization: This describes theft or burglary. Embezzlement requires the perpetrator to be an insider who already has legitimate access to the assets.

Therefore, the suggested answer B is the best option as it directly aligns with the definition of embezzlement.