CPP Purchase Requisition & Order Processing

Question 1

What is a purchase requisition?

Accepted Answer

An internal request to buy items

Answer

A purchase requisition is an internal document used within an organization to formally request the procurement of goods or services. It originates from a department or individual who identifies a need and serves as the initial step in the purchasing process, signaling to the purchasing department what needs to be bought. It is distinct from external documents like invoices or shipping documents.

Question 2

Who typically approves a purchase requisition?

Accepted Answer

An authorized approver or manager

Answer

A purchase requisition typically requires approval from an authorized manager or designated approver before it can proceed to the purchasing department. This approval step is a crucial internal control mechanism. It ensures that the requested items are necessary, within budget, and align with organizational policies, preventing unauthorized or unnecessary spending.

Question 3

What does a purchase order (PO) represent?

Accepted Answer

A contract to purchase from a supplier

Answer

A purchase order (PO) is a legally binding document issued by a buyer to a seller, indicating the types, quantities, and agreed prices for products or services. Once the supplier accepts the PO, it becomes a formal contract. This document outlines the terms and conditions of the purchase, serving as a critical record for both parties.

Question 4

Why is order processing important in purchasing?

Accepted Answer

It ensures correct and timely fulfillment

Answer

Order processing is vital in purchasing as it ensures that goods and services are procured correctly and delivered in a timely manner. An efficient order processing system minimizes errors, streamlines communication with suppliers, and tracks the status of orders from placement to delivery. This directly contributes to operational continuity and customer satisfaction by ensuring necessary items are available when needed.

Question 5

What document is often matched with a PO to confirm receipt?

Accepted Answer

Receiving report

Answer

The receiving report is a crucial document in the purchasing process, as it formally records the goods or services that have been physically received. This report is then matched against the original purchase order (PO) to verify that the correct items, quantities, and specifications have been delivered. This 'two-way match' (or 'three-way match' when including the invoice) is essential for inventory accuracy and payment authorization.

(CPP) Certified Purchasing Professional Practice Test

(CPP) Certified Purchasing Professional Practice Test

CPP Purchase Requisition & Order Processing