Purchase Requisition & Order Processing Flashcards

Which type of purchase order is issued for a specific one-time purchase with a defined quantity and price?

Answer: Standard PO

A standard PO is a one-time order with defined quantity, price, and delivery terms for a specific purchase.

A purchase requisition is considered 'urgent' when:

Answer: The required delivery date does not allow for normal lead time

Urgency is determined by delivery timelines that fall within or below standard procurement lead times.

In a decentralized purchasing model, who typically has authority to issue purchase orders?

Answer: Individual departments or business units

Decentralized purchasing distributes purchasing authority to individual departments or business units rather than concentrating it centrally.

Which term describes the practice of consolidating multiple small requisitions into a single purchase order?

Answer: Demand aggregation

Demand aggregation combines multiple small orders into one, leveraging volume discounts and reducing administrative costs.

A purchase order acknowledgment (POA) from a supplier serves to:

Answer: Confirm the supplier has received and accepted the PO terms

A POA confirms the supplier acknowledges receipt of the PO and agrees to fulfill it under the stated terms.

Which of the following BEST describes 'maverick spending' in procurement?

Answer: Purchases made outside approved channels without a purchase order

Maverick spending occurs when employees make purchases outside approved channels, bypassing procurement controls and contracts.

Which document in the procure-to-pay cycle triggers payment to the supplier?

Answer: Supplier invoice matched to PO and receiving report

Payment is triggered when the supplier invoice is successfully matched to the PO and receiving report in a three-way match.