OPINION ON APPELLANT’S PETITION FOR DISCRETIONARY REVIEW
CAMPBELL, Judge.
Appellant was convicted by a jury of the offense of theft of property of the value of at least $10,000. See V.T.C.A. Penal Code, § 31.03(a) (Supp.1986). Punishment was assessed at ten years confinement in the Texas Department of Corrections. In an unpublished opinion, the Court of Appeals affirmed. Clark v. State, No. 05-82-000893-CR (Tex.App. — Dallas, delivered February 21, 1984) (opinion on rehearing). We granted appellant’s petition for discretionary review to determine 1) whether an extraneous offense should have been admitted and 2) whether the evidence was sufficient to prove ownership as alleged in the indictment.1 We will reverse on the first ground for review but find the evidence sufficient to prove ownership in the second ground for review.
While working as a bookkeeper for Orthopedic Associates of Dallas, appellant endorsed 26 insurance checks payable to Orthopedic Associates and deposited them in her personal bank account. The State presented testimony from the vice-president of appellant’s bank, the business manager of Orthopedic Associates and a document examiner. The vice-president established that appellant was the sole signatory for her bank account and that the 26 checks had been deposited in her account. The business manager established that she hired appellant as a bookkeeper. Appellant’s duties included crediting insurance checks to the proper patient’s account, endorsing the checks and preparing a daily deposit ticket. Appellant did not obtain the business manager’s consent to endorse insurance checks over to herself, and the business manager testified that she (the business manager) had a greater right to possession of the checks than did appellant. The documents examiner established that appellant had endorsed all of the checks in her own handwriting.
In addition, the State offered proof that appellant had worked for a company called Optical Clinic as an accounts payable clerk after leaving Orthopedic Associates and had forged 14 company checks, making them payable to herself. The same documents examiner established that appellant had forged the checks.
[122]*122Prior to introduction of the extraneous transactions involving Optical Clinic, appellant objected and argued that they were inadmissible because the State’s witnesses had not been discredited or impeached on cross-examination. The State argued that the extraneous transactions were admissible to show appellant’s intent, a common plan and scheme, as well as appellant’s identity. The trial court overruled appellant’s objection without further explication. In the court’s charge to the jury, the trial court instructed the jury that it could only consider the extraneous transactions in determining appellant’s state of mind, intent, motive or scheme.2
Appellant cross-examined the State’s witnesses, largely pointing out that there was no direct evidence of appellant taking checks from Orthopedic Associates. However, appellant did not testify. Nor did she present any defensive testimony.
I. Extraneous Offenses
The Court of Appeals held that since the State was relying upon circumstantial evidence, it was entitled to introduce evidence of the extraneous forgery offenses to prove appellant’s intent and motive to commit theft as well as a common system, scheme or plan. Clark, supra, at 3-4.
Appellant argues that the extraneous offenses only served to show appellant’s bad character and should not have been admitted. We agree.
This Court must scrutinize those cases wherein prejudicial evidence of extraneous offenses is admitted to prevent a defendant from being convicted of some collateral crime or for being a criminal generally. See Albrecht v. State, 486 S.W.2d 97 (Tex.Cr.App.1972). The test for admitting an extraneous offense requires the following:
First, it must be determined that the extraneous offense evidence is relevant to a material issue in the case other than defendant’s character. Second, the evidence must possess probative value which outweighs its inflammatory or prejudicial effect.
Plante, supra at 491 (Tex.Cr.App.1985) [footnote omitted], citing Williams v. State, 662 S.W.2d 344 (Tex.Cr.App.1983).
“[W]here intent or guilty knowledge is an essential element of the offense which the State must prove to obtain a conviction, its materiality goes without saying.” Morgan v. State, 692 S.W.2d 877, 880 (Tex.Cr.App.1985). In the instant case, the State was required to prove, inter alia, that appellant knowingly or intentionally appropriated checks from Orthopedic Associates. Therefore, intent was a material issue.
In weighing probative value against prejudicial effect, this Court has consistently held that the State may not introduce extraneous offenses as circumstantial evidence of an element in its case-in-chief if that element can readily be inferred from other uncontested evidence. Morgan v. State, 692 S.W.2d 877, 880 (Tex.Cr.App.1986); Robinson v. State, 701 S.W.2d 895, 898-99 (Tex.Cr.App.1985); Nance v. State, 647 S.W.2d 660, 662, quoting Ruiz v. State, 579 S.W.2d 206, 209 (Tex.Cr.App.1979) and Albrecht, supra, at 101. The State’s evidence may be considered contested if “completely undermined by defense cross-examination.” Albrecht, supra, at 102.
In the instant case, the State introduced the extraneous offenses as circumstantial evidence of appellant’s intent to appropriate the checks from Orthopedic Associates. However, appellant’s intent could be readily inferred from the abundant circumstantial evidence in the State’s case-in-chief. The State offered proof that appellant’s signature, in her own handwriting, was present on Orthopedic Associates’ checks, and had been deposited into appellant’s account. The jury could clearly draw an inference from such evidence that appellant intentionally appropriated the checks for her own use.
[123]*123Although appellant cross-examined the State’s witnesses, she did not undermine its case on the issue of intent. At best, appellant emphasized that there was no direct evidence that she had committed the instant offense. The cross-examination only suggests the possibility that appellant did not commit the offense because no one saw her commit it, thus tangentially challenging the issue of identity. Even that challenge failed to undermine the State’s case because appellant left the State’s circumstantial identification evidence largely untouched.
Additionally, the probative value of an extraneous offense is dependent upon its similarity to the charged offense. See Plante, supra, at 493-94. In fact, a high degree of similarity is required when identity is the issue at bar. Id, at 494.
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OPINION ON APPELLANT’S PETITION FOR DISCRETIONARY REVIEW
CAMPBELL, Judge.
Appellant was convicted by a jury of the offense of theft of property of the value of at least $10,000. See V.T.C.A. Penal Code, § 31.03(a) (Supp.1986). Punishment was assessed at ten years confinement in the Texas Department of Corrections. In an unpublished opinion, the Court of Appeals affirmed. Clark v. State, No. 05-82-000893-CR (Tex.App. — Dallas, delivered February 21, 1984) (opinion on rehearing). We granted appellant’s petition for discretionary review to determine 1) whether an extraneous offense should have been admitted and 2) whether the evidence was sufficient to prove ownership as alleged in the indictment.1 We will reverse on the first ground for review but find the evidence sufficient to prove ownership in the second ground for review.
While working as a bookkeeper for Orthopedic Associates of Dallas, appellant endorsed 26 insurance checks payable to Orthopedic Associates and deposited them in her personal bank account. The State presented testimony from the vice-president of appellant’s bank, the business manager of Orthopedic Associates and a document examiner. The vice-president established that appellant was the sole signatory for her bank account and that the 26 checks had been deposited in her account. The business manager established that she hired appellant as a bookkeeper. Appellant’s duties included crediting insurance checks to the proper patient’s account, endorsing the checks and preparing a daily deposit ticket. Appellant did not obtain the business manager’s consent to endorse insurance checks over to herself, and the business manager testified that she (the business manager) had a greater right to possession of the checks than did appellant. The documents examiner established that appellant had endorsed all of the checks in her own handwriting.
In addition, the State offered proof that appellant had worked for a company called Optical Clinic as an accounts payable clerk after leaving Orthopedic Associates and had forged 14 company checks, making them payable to herself. The same documents examiner established that appellant had forged the checks.
[122]*122Prior to introduction of the extraneous transactions involving Optical Clinic, appellant objected and argued that they were inadmissible because the State’s witnesses had not been discredited or impeached on cross-examination. The State argued that the extraneous transactions were admissible to show appellant’s intent, a common plan and scheme, as well as appellant’s identity. The trial court overruled appellant’s objection without further explication. In the court’s charge to the jury, the trial court instructed the jury that it could only consider the extraneous transactions in determining appellant’s state of mind, intent, motive or scheme.2
Appellant cross-examined the State’s witnesses, largely pointing out that there was no direct evidence of appellant taking checks from Orthopedic Associates. However, appellant did not testify. Nor did she present any defensive testimony.
I. Extraneous Offenses
The Court of Appeals held that since the State was relying upon circumstantial evidence, it was entitled to introduce evidence of the extraneous forgery offenses to prove appellant’s intent and motive to commit theft as well as a common system, scheme or plan. Clark, supra, at 3-4.
Appellant argues that the extraneous offenses only served to show appellant’s bad character and should not have been admitted. We agree.
This Court must scrutinize those cases wherein prejudicial evidence of extraneous offenses is admitted to prevent a defendant from being convicted of some collateral crime or for being a criminal generally. See Albrecht v. State, 486 S.W.2d 97 (Tex.Cr.App.1972). The test for admitting an extraneous offense requires the following:
First, it must be determined that the extraneous offense evidence is relevant to a material issue in the case other than defendant’s character. Second, the evidence must possess probative value which outweighs its inflammatory or prejudicial effect.
Plante, supra at 491 (Tex.Cr.App.1985) [footnote omitted], citing Williams v. State, 662 S.W.2d 344 (Tex.Cr.App.1983).
“[W]here intent or guilty knowledge is an essential element of the offense which the State must prove to obtain a conviction, its materiality goes without saying.” Morgan v. State, 692 S.W.2d 877, 880 (Tex.Cr.App.1985). In the instant case, the State was required to prove, inter alia, that appellant knowingly or intentionally appropriated checks from Orthopedic Associates. Therefore, intent was a material issue.
In weighing probative value against prejudicial effect, this Court has consistently held that the State may not introduce extraneous offenses as circumstantial evidence of an element in its case-in-chief if that element can readily be inferred from other uncontested evidence. Morgan v. State, 692 S.W.2d 877, 880 (Tex.Cr.App.1986); Robinson v. State, 701 S.W.2d 895, 898-99 (Tex.Cr.App.1985); Nance v. State, 647 S.W.2d 660, 662, quoting Ruiz v. State, 579 S.W.2d 206, 209 (Tex.Cr.App.1979) and Albrecht, supra, at 101. The State’s evidence may be considered contested if “completely undermined by defense cross-examination.” Albrecht, supra, at 102.
In the instant case, the State introduced the extraneous offenses as circumstantial evidence of appellant’s intent to appropriate the checks from Orthopedic Associates. However, appellant’s intent could be readily inferred from the abundant circumstantial evidence in the State’s case-in-chief. The State offered proof that appellant’s signature, in her own handwriting, was present on Orthopedic Associates’ checks, and had been deposited into appellant’s account. The jury could clearly draw an inference from such evidence that appellant intentionally appropriated the checks for her own use.
[123]*123Although appellant cross-examined the State’s witnesses, she did not undermine its case on the issue of intent. At best, appellant emphasized that there was no direct evidence that she had committed the instant offense. The cross-examination only suggests the possibility that appellant did not commit the offense because no one saw her commit it, thus tangentially challenging the issue of identity. Even that challenge failed to undermine the State’s case because appellant left the State’s circumstantial identification evidence largely untouched.
Additionally, the probative value of an extraneous offense is dependent upon its similarity to the charged offense. See Plante, supra, at 493-94. In fact, a high degree of similarity is required when identity is the issue at bar. Id, at 494. In the instant case, the extraneous offenses are dissimilar from the charged offense in a significant respect. Appellant took the checks from Optical Clinic by forgery. There was no forgery involved in the instant case; instead, the checks were removed by direct appropriation. In the absence of a similar modus operandi, the probative value of the extraneous offenses is severely lessened.
Under these circumstances, we find that the prejudicial effect of admitting the extraneous offenses outweighed their probative value. Therefore, it was error for the trial court to admit the extraneous offenses.
Appellant received a ten year prison sentence, despite being eligible for probation. There is not only a reasonable but distinct possibility that the inadmissible extraneous offenses might have contributed to either the conviction or the punishment assessed. See generally, Maynard v. State, 685 S.W.2d 60, 67 (Tex.Cr.App.1985). Therefore, the error was not harmless.
II. Proof of Ownership
The Court of Appeals, citing Compton v. State, 607 S.W.2d 246, 250-251 (Tex.Cr.App.1980) cert. denied 450 U.S. 997, 101 S.Ct. 1701, 68 L.Ed.2d 197 (1981), and Cross v. State, 590 S.W.2d 510 (Tex.Cr.App.1979), held that there was sufficient evidence for the trier of fact to conclude that the business manager of Orthopedic Associates, Rae Barr, had a greater right to possess the stolen checks than appellant. We agree.
This Court recently reaffirmed Compton, supra, and, implicitly, Cross, supra. Dingier v. State, 705 S.W.2d 144 (Tex.Cr.App.1984) (opinion on rehearing) (adopting dissenting opinion on original submission, which relied upon Compton and Cross). Applying Compton and Cross to the instant facts, we find that the State offered sufficient evidence of Rae Barr’s managerial authority over appellant and the stolen checks to prove that Barr had a greater right to possess the checks than appellant.3
The judgments of the Court of Appeals and the trial court are reversed, and the instant cause is remanded to the trial court.
TOM G. DAVIS and MILLER, JJ., concur in result.
ONION, P.J., and W.C. DAVIS, McCORMICK and WHITE, JJ. dissent.
CLINTON and TEAGUE, JJ. dissent to overruling second ground for review for reasons stated in Dingier v. State, 705 S.W.2d 144,147 (Tex.Cr.App.1984) (Concurring opinion on original submission) and in Freeman v. State, 707 S.W.2d 597, 606 (Tex.Cr.App.1986) (Dissenting opinion).
Before the Court en banc.