Which of the following documents associated with the acquisition / payment process is most likely to lead to a journal entry that debits inventory and credits accounts payable?
A)Purchase requisition, purchase order and receiving report
B)Purchase order, receiving report and invoice
C)Purchase requisition, receiving report and invoice
D)None of the above

Question

Quizplus · Accepted Answer

When a company purchases inventory, it normally starts with a purchase order (PO) to the supplier. After the supplier delivers the goods, a receiving report is prepared, comparing the items delivered with those ordered. Finally, the supplier sends the buyer an invoice, asking for payment. When this invoice is received, the Accounting Department records the transaction by debiting inventory (increase) and crediting accounts payable (increase). This means that the company's inventory account will increase, reflecting the arrival of additional goods, while the accounts payable account will also increase, reflecting the company's obligation to pay for these goods at a later time. Therefore, the correct answer is option B, which includes all three documents: PO, receiving report, and invoice.

Which of the Following Documents Associated with the Acquisition