The Purchases and payment cycle

What type of transactions does the Purchases and Payment Cycle relate to?

• Inventory Management in the warehouse

• Selling products to customers on credit and collecting payment

• Purchasing goods and services from reliable suppliers

• Paying fair wages and salaries to employees

• Purchase of capital assets like land and buildings and machinery

In a typical Purchases and payment cycle, which of the following documents will be generated by the supplier?

• Purchase Requisitions

• Delivery Note

• Remittance advice

• Goods received note

• Purchase order

Which of the following functions does NOT relate the purchases and payment cycle?

• Credit Management

• Receiving of goods

• Ordering of goods

• Recording payment to a supplier

• Returning damaged goods to the supplier

In a typical Purchases and payment cycle, which of the following functions does NOT receive a copy of the purchase order?

• The supplier

• The goods receiving function

• The accounting department

• The sales department

• The warehouse who made the request

In a typical Purchases and payment cycle, what document should be prepared to record the actual goods that were delivered in the goods receiving area?

• Purchase Order

• Purchase Requisition

• Invoice

• Delivery Note

• Goods Received Note

When goods are returned to a supplier, which document should be prepared by the accounting department instructing the supplier to reduce the outstanding balance?

• Invoice

• Credit Note

• Debit Note

• Goods Received Note

• Purchase Order