Question

When a purchase invoice is received from a supplier which two of these documents should be checked before it is recorded in the cloud-based accountancy software?

A) sales order
B) purchase order
C) remittance advice
D) goods received note
E) credit note

Answer 1

Before recording a purchase invoice in accountancy software, it's important to verify the invoice by comparing it to the purchase order and the goods received note. This ensures accuracy in financial records and prevents payment issues.

Step-by-step explanation:

When a purchase invoice is received from a supplier, it's essential to verify the accuracy of the invoice before recording it in any accountancy software. To ensure proper matching and to avoid discrepancies in accounting records, two documents should be compared against the purchase invoice.

• B) Purchase Order: This document is the original request made to the supplier for goods or services. It includes details like the types of items, quantities, and agreed-upon prices. By comparing the purchase invoice to the purchase order, you can confirm that what was ordered matches what is being charged.
• D) Goods Received Note (GRN): This document confirms receipt of the goods ordered. It is an acknowledgment that the goods have been physically received and it should detail the condition and quantity of those goods.

Checking these documents before entering an invoice into your cloud-based accountancy software ensures that you only pay for goods or services that have been both ordered and received. This is a key process in purchase invoice verification that helps to maintain accurate financial records and can prevent issues like duplicate payments or paying for undelivered services.