A purchase is recognized in the accounting records when
A) an order is placed with the seller
B) the purchase requisition is sent to the purchasing department.
C) title transfers from the seller to the buyer.
D) the buyer receives the bill from the seller

Question

Quizplus · Accepted Answer

A purchase is recognized in the accounting records when title transfers from the seller to the buyer. This is known as the point of sale, and it is the point at which the buyer becomes responsible for the asset and the seller is entitled to the payment for it. It is only after this point that the transaction is recorded in the company's accounts. The other options do not necessarily indicate that a purchase has been made, as placing an order or sending a purchase requisition does not guarantee that the transaction will be completed, and receiving a bill only indicates that the seller has sent a request for payment, which may or may not be related to a completed sale.

A Purchase Is Recognized in the Accounting Records When