Purchase Order Processing & Systems Flashcards
7 cards from real CPP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Purchase Order Processing & Systems flashcards as text
Which type of purchase order is most appropriate when a buyer needs to procure goods or services over an extended period at pre-negotiated prices?
Answer: Blanket purchase order
A blanket purchase order establishes pre-negotiated terms and pricing for recurring purchases over a defined period, reducing administrative overhead.
In an ERP-integrated procurement system, what is the primary function of a goods receipt (GR) document?
Answer: To confirm the physical receipt and quality acceptance of ordered items
A goods receipt document confirms that ordered items have been physically received and accepted, triggering the three-way match process for payment.
A purchase order is sent to a supplier who then ships goods without acknowledging the PO. What legal risk does this create for the buyer?
Answer: There may be uncertainty about whether the supplier accepted the exact terms and conditions
Without a PO acknowledgment, ambiguity exists about whether the supplier accepted the buyer's specific terms and conditions, which can complicate dispute resolution.
Which PO processing metric measures the average time from purchase requisition approval to PO issuance?
Answer: Requisition-to-order cycle time
Requisition-to-order cycle time measures procurement department efficiency from the point a requisition is approved until the PO is issued to the supplier.
When implementing an e-procurement system, which feature most directly reduces 'maverick spending'?
Answer: Enforced catalog purchasing with pre-approved vendors and prices
Catalog purchasing within an e-procurement system enforces use of pre-approved vendors at negotiated prices, eliminating unauthorized off-contract purchases.
A buyer discovers that a supplier invoiced for 500 units but the goods receipt shows only 475 units were delivered. What is the correct procurement action?
Answer: Issue a partial payment for 475 units and request a revised invoice or credit
The buyer should pay only for goods received (475 units) and request a credit memo or revised invoice reflecting the actual quantity delivered.
Which of the following best describes a 'change order' in purchase order management?
Answer: A formal amendment to an existing PO modifying quantity, price, delivery, or specifications
A change order is a formal, documented amendment to an existing PO that modifies one or more of its original terms while maintaining the same PO number.