Final answer:
It is true that Accounts Payable must reconcile an invoice with the Purchase Order and Receiving Report. This is a standard practice in the accounts payable process which ensures the accuracy and legitimacy of the transactions prior to payment.
Step-by-step explanation:
True. If Accounts Payable (AP) receives an invoice directly from the supplier, it does need to be reconciled with the Purchase Order (PO) and the Receiving Report.
This is a critical step in the accounts payable process which ensures that the goods or services billed by the supplier match what was actually ordered and received.
Reconciling these documents helps to verify the accuracy of the invoice before payment, preventing overpayments and detecting errors or fraudulent charges.
The PO is the document that formally communicates the intent to purchase products or services.
The Receiving Report documents the receipt of the goods or services. When an invoice is received, the AP department must check that the quantities, prices, and terms on the invoice match what was agreed upon in the PO and what was actually received as per the Receiving Report.
This three-way match is crucial in confirming that transactions are legitimate and authorized before proceeding with payment.