Question

Your boss asked you to record an order she just placed for some inventory. You haven't received the items yet, and don't owe anything to your vendor/supplier at this time. How would you record this in QuickBooks?

a) Create a purchase order to document the order placed.
b) Record the transaction as an accounts payable entry.
c) Document the order in a memo field for reference.
d) Wait until the items are received to record the transaction.

Answer 1

To document an order without immediate financial obligation in QuickBooks, you should create a purchase order. This helps track orders made before receiving the goods or incurring a financial obligation, and later facilities invoice matching.

Step-by-step explanation:

Your boss asked you to record an order that has been placed but for which the inventory has not yet been received, and no payment is currently owed. In QuickBooks, the correct way to record this transaction would be to create a purchase order (a) to document the order placed. A purchase order is a financial document that represents an intent to buy products or services from a vendor, without creating an immediate financial obligation. Once the items are received, and the invoice is issued by the vendor, then you would record the transaction as an accounts payable entry (reflecting that you now owe money for the goods).

Purchase orders in QuickBooks help you keep track of orders you have made but where the transaction is not complete because you have not received the goods or services. Using purchase orders can be very helpful for future reference and for matching against the vendor invoices for accuracy when they arrive.