Day: December 18, 2025

Accounting Multiple Choice Question – 18 December 2025

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

An effective system of internal control requires segregation of basic functions.

Which ONE of the following functions does not ideally need to be segregated?

Select ONE answer:

  1. Authorisation of transactions
  2. Budgetary control
  3. Custody or handling of assets
  4. Recording of transactions

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

  1. Not correct
  2. Correct => Authorisation of transactions, custody or handling of assets and recording of transactions are the three functions which should ideally be separated such that no-one person can initiate the transaction, record that transaction in the accounting records and have custody of assets which arise from that transaction. For fraud to take place, with such segregation of duties, there would have to be significant collusion. Budgetary Control is a function which follows from the recording of transactions can only take place once there is confidence on the integrity of data coming from effective internal control systems.
  3. Not correct
  4. Not correct

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