CPP Purchase Requisition & Order Processing 4

Question 1

What is the significance of a PO number in the order processing workflow?

Accepted Answer

It uniquely identifies the transaction and links documents across the procure-to-pay cycle

Answer

It serves as the supplier's internal tracking code

Answer

It authorizes accounts payable to issue payment immediately

Answer

It replaces the need for a formal supplier contract

Question 2

Which of the following BEST justifies requiring a purchase requisition before issuing a PO?

Accepted Answer

It ensures budget availability and internal authorization before committing funds

Answer

It reduces the number of approved suppliers

Answer

It eliminates the need for competitive bidding

Answer

It speeds up emergency procurement

Question 3

An organization uses a procurement card (P-card) primarily to:

Accepted Answer

Streamline low-value, routine purchases with reduced administrative burden

Answer

Replace all purchase orders for high-value goods

Answer

Bypass supplier qualification requirements

Answer

Manage capital expenditure approvals

Question 4

When a supplier's delivery contains fewer items than ordered, the buyer should:

Accepted Answer

Issue a partial receipt and hold payment until the shortage is resolved

Answer

Pay the full invoice amount and wait for back-order delivery

Answer

Cancel the PO and source from a different supplier immediately

Answer

Return all received goods and request a complete reshipment

Question 5

Which of the following is an example of an internal control weakness in the requisition process?

Accepted Answer

Allowing the requisitioner to also approve their own requisition

Answer

Requiring manager approval for all requisitions above $500

Answer

Maintaining a segregation of duties between requisitioning and receiving

Answer

Using a numbering system to track all requisitions

Question 6

In electronic procurement (e-procurement), a key advantage over paper-based processes is:

Accepted Answer

Faster cycle times and improved spend visibility through automation

Answer

Elimination of supplier negotiations

Answer

Removal of the need for purchase orders

Answer

Guaranteed lowest pricing from all suppliers

Question 7

A 'not-to-exceed' (NTE) clause in a purchase order means:

Accepted Answer

Total charges billed by the supplier may not surpass the specified dollar limit

Answer

The supplier cannot reduce the price below the stated amount

Answer

The buyer is obligated to purchase the full quantity specified

Answer

Delivery must not exceed the stated number of days