Which of the Following Is the First Step in the Purchasing

question 50

Multiple Choice

Which of the following is the first step in the purchasing and payment process?

• A)The supplier ships the goods and sends an invoice to the purchaser.
• B)The purchaser sends a purchase order to the supplier.
• C)The purchaser sends a cheque to the supplier.
• D)The purchaser receives the inventory and prepares a receiving report.

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Definitions:

Activity-Based Costing

An accounting method that assigns costs to products or services based on the activities required to produce them, emphasizing cost drivers.

Direct Labor-Hours

Direct labor-hours refer to the total number of hours worked by employees that are directly involved in the manufacturing process of a company's products.

Traditional Costing

A costing method that applies indirect costs to products based on a predetermined overhead rate, often not considering the actual activities that incur costs.

Overhead Assigned

The process of allocating manufacturing overhead costs to specific units of product based on a predetermined rate or method.