ACCA Applied Knowledge · Business and Technology · The relationship between accounting and other business functions
Kestrel Ltd's production manager asks for a new component. The purchasing department obtains quotes, issues an order to the chosen supplier, and the goods are delivered to the stores. Which document is normally sent by the purchasing department to the supplier to formally commit the company to buy?
The purchase order is the document sent by the purchasing department to the supplier to commit the company to buy. A requisition is only an internal request, a goods received note records delivery, and a remittance advice relates to payment.
- AGoods received note
- BPurchase orderCorrect
- CPurchase requisition
- DRemittance advice
Explanation
A purchase order is issued by purchasing to the supplier and forms the commitment to buy. A requisition is an internal request from the user department. A goods received note is raised by stores on delivery. A remittance advice accompanies payment.
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