CPP Purchase Order Processing & Systems 3

Question 1

In a procure-to-pay (P2P) process, which step immediately follows purchase order approval?

Accepted Answer

PO transmission to supplier

Answer

Invoice receipt and matching

Answer

Supplier selection and negotiation

Answer

Budget encumbrance release

Question 2

What is the purpose of an 'encumbrance' in purchase order accounting?

Accepted Answer

To reserve budget funds at the time a PO is issued, before actual payment

Answer

To record actual expenditures once goods are received

Answer

To track supplier credit limits

Answer

To document price variances between PO and invoice

Question 3

A company uses a two-way match process for low-value purchases. Which two documents are compared?

Accepted Answer

Purchase order and supplier invoice

Answer

Purchase requisition and purchase order

Answer

Goods receipt and supplier invoice

Answer

Purchase order and goods receipt

Question 4

Which EDI transaction set is commonly used to transmit purchase orders electronically between trading partners?

Accepted Answer

EDI 850

Answer

EDI 810

Answer

EDI 856

Answer

EDI 997

Question 5

A purchasing manager wants to reduce the number of individual POs issued for routine office supplies. Which strategy best addresses this?

Accepted Answer

Consolidating purchases using a procurement card (P-card) program

Answer

Implementing a vendor-managed inventory program

Answer

Issuing a single annual purchase order for all supplies

Answer

Requiring competitive bids for all supply purchases

Question 6

Under the Uniform Commercial Code (UCC), when does title to goods typically transfer from seller to buyer in a FOB destination shipment?

Accepted Answer

When the goods arrive at the buyer's destination

Answer

When the seller ships the goods

Answer

When the buyer issues the purchase order

Answer

When the buyer pays the invoice

Question 7

Which PO system feature allows a buying organization to automatically generate replenishment orders when inventory falls below a set level?

Accepted Answer

Kanban or min/max reorder triggering

Answer

Supplier portal integration

Answer

Dynamic discounting module

Answer

Contract lifecycle management