The three basic functions that should, if at all possible, be performed by three different people in a municipal court are

• A. Authorization (approval) of transactions; Recording of transactions; Custody of assets (cash and other property)
• B. Recording of transactions; Custody of assets; Verification of performance
• C. Authorization (approval) of transactions; Cash handling; Data entry
• D. Authorization (approval) of transactions; Posting to ledgers; Custody of assets

Answer: (A)

Separating duties is the key principle here. If three different people handle the three steps—authorizing transactions, recording them, and safeguarding assets—you create checks and balances that reduce the risk of mistakes or fraud. In a municipal court, this means someone other than the person who approves a transaction should approve it, someone else should enter or record the transaction in the system, and a third person should be responsible for guarding cash and other assets.

The best answer assigns Authorization of transactions to one person, Recording of transactions to a second person, and Custody of assets (cash and other property) to a third. This separation means no single individual can both approve and handle the asset or both approve and record, making it much harder to conceal errors or theft and easier to detect discrepancies.

Why the other options fit less well: they mix two of these duties or place cash handling with recording or posting, which weakens internal controls. When duties overlap, there’s a greater chance for misappropriation or unrecorded activity because one person can both handle assets and influence records. By keeping authorization, recording, and custody with three distinct people, the control system remains robust against these risks.