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ACCA Applied Knowledge · Business and Technology · The relationship between accounting and other business functions

Which of the following is the primary objective of the purchasing function in a business?

The purchasing function aims to acquire goods and services of the right quality, in the right quantity, at the right time and at the best overall price. Lowest price alone is not the objective, because quality, reliability and delivery also affect total cost and operations.

  1. ATo obtain goods and services of the required quality, in the right quantity, at the right time and at the best overall priceCorrect
  2. BTo always select the supplier offering the lowest unit price
  3. CTo maximise the level of inventory held to avoid any shortages
  4. DTo authorise payment of supplier invoices once goods are received

Explanation

Purchasing aims to balance quality, quantity, timing, price and supplier reliability, not price alone. Choosing the lowest price ignores quality and delivery. Holding maximum inventory raises costs. Paying invoices is a payables/finance activity.

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