When Purchasing Inventory,which Document Usually Triggers the Recording of a Liability

question 78

Multiple Choice

When purchasing inventory,which document usually triggers the recording of a liability?

• A)purchase requisition
• B)purchase order
• C)receiving report
• D)supplier's invoice

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Definitions:

Increase In Liabilities

An upward adjustment in the obligations a company owes to external parties, which could be due to loans, accounts payable, or other financial commitments.

Reduction In Operating Assets

A decrease in the value or amount of assets used for generating revenue.

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment relative to its cost.

Average Operating Assets

The average value of the assets used in day-to-day operations over a certain period, important for determining return on investment and operational efficiency.