Purchasing – Exercises

Unit: Purchasing-A/P
Topic: Procurement Process

At the conclusion of this exercise, you will be able to:

 Perform the steps in purchasing process
 Create good receipt POs for partial quantities
 View inventory status for items purchased
 Discuss the effects of the purchasing documents on inventory
and accounting

In this exercise, you create a purchase order for required items.

One of the items has never been ordered before, so you create an
item master record. When the vendor delivers partial quantities,
you create a goods receipt PO. You use the inventory status report
to view stock quantities. Later you create a second goods receipt
for an additional delivery. When the vendor’s invoice arrives, you
enter an A/P invoice and process the vendor payment.
You perform the purchasing process a second time to better
understand the effect on inventory and accounting during each
step of the process.

1-1 You want to place an order with your vendor, V10000. To do so, you call up the
purchase order document and enter the vendor number. You order two units of
items C00009, C00010, and C00011.
1-1-1 Enter the following values in the purchase order.
Field Name or Data Type Values
Vendor V10000
Item No. C00009
Quantity 2
Item No. C00010
Quantity 2
Item No. C00011
Quantity 2
Just before you enter a zip drive as a fourth item, you realize that this item
does not have a master record, so you create an item master record.
 Use the following values for the new item master:
Field Name or Data Type Values
Item No. TA200
Item Description Zip Drive

Enter the information and go back to your purchase order. Enter a price in
the Price field in the purchase order.
Do not save the purchase order yet!

1-1-2 Since the goods are often delivered on different dates, you want to display
the delivery date column in your item table. The same applies for the
warehouse.
Set the delivery date and warehouse fields as active and visible.
Do not save the purchase order yet!

1-1-3 What payment terms does the system suggest? How did it determine these?
___________________________________________________________
___________________________________________________________

1-1-4 Add the purchase order.

Purchase Order Number: _____________
Choose OK.

1.2 The delivery for your purchase order has arrived, however it is not exactly what
you had ordered. The vendor's delivery document refers to your purchase order
number.

Enter a Goods Receipt PO with reference to the purchase order document. Enter
the vendor number and display all the open purchase order documents.

Field Name or Data Type Values

Vendor V10000
1-2-1 The vendor did not deliver all the items and quantities. The vendor
delivered the full quantity for C00009 and TA200, but delivered only a
quantity of 1 for the C00010. C00011 was not delivered by the vendor.
For this reason, copy 3 of the 4 items to your Goods Receipt PO in the
Draw Document Wizard and change the quantity of C00010 to 1.
Save your goods receipt document.
Goods Receipt Number: _____________
 1-2-2 Check the current stock situation of items C00010 - C00011 using the
Inventory Status Report within the Inventory Reports. Record the
quantities below.

C00010 C00011
In Stock
Committed
Ordered
Available

1-2-3 You receive an additional delivery for the same purchase order. The vendor
delivers all the remaining items. Create a goods receipt PO for these items.
Field Name or Data Type Values
Vendor V10000
Add the goods receipt document.
1-2-4 V10000 sends you an invoice for the above deliveries with the invoice
number of 00125/40. Enter an A/P invoice in the system to represent the
vendor’s request for payment.

Field Name or Data Type Values

Vendor V10000
Vendor Ref. No. 00125/04

1-2-5 Record all the items, referring to the two deliveries when you enter the
invoice. Post the invoice to the system.
A/P Invoice Number: _____________

1-2-6 Pay the vendor’s invoice.

Field Name or Data Type Values
Code V10000
Post the payment.

2-1 You want to view the effect of each document in the purchasing process on
accounting and inventory. You will follow the steps of the purchasing process
again from purchase order through A/P invoice.
 2.1.1 Create a purchase order for the vendor V20000. You order 5 units of items
A00001.

Field Name or Data Type Values

Vendor V20000
Item No. A00001
Quantity 5
Save the purchase order.
Purchase Order Number: _____________
2-1-2 You want to first determine which warehouse is the assigned for this item,
so that you can then determine the stock level for that warehouse.
2-1-3 Check the stock level currently found in that warehouse.
2-1-4 Leave the purchase order open.

2-2 The items on your purchase order have arrived. You will create a goods receipt PO
from the purchase order. When you save the goods receipt PO, you will check the
stock level and journal entry to see how this document affects inventory and
accounting.

From the open purchase order, create a goods receipt PO.

2-2-1 Check the rows and quantities in the Goods Receipt PO to make sure they
match the quantities delivered by the vendor.

Field Name or Data Type Values

Item No. A00001
Quantity 5

Then save the Goods Receipt PO.

Goods Receipt Number: _____________
2-2-2 Open the Goods Receipt PO you just created and check the effects of the
Goods Receipt PO.
2-2-2-1 View the item master record.
Choose the correct tab for to check inventory quantity.

Which column shows the increase caused by the Goods Receipt

PO?
__________________________________________________

Return to the Goods Receipt PO.

 2-2-2-2 View the journal entry to see the effect of the Goods Receipt PO
on accounting.

What were the two posting that were created automatically

because the system is using perpetual inventory?
___________________________________________________

___________________________________________________

Return to the Goods receipt PO.

2-3 A vendor invoice for the delivered items arrives. You will create an A/P invoice to
pay the vendor. When you save the A/P invoice, you will check the journal entry to
see how this document affects accounting.

From the open Goods Receipt PO, create an A/P invoice.

Enter the invoice number (55723-09) and invoice date (yesterday’s date) from the
vendors invoice into the appropriate fields.

Field Name or Data Type Values

Vendor Ref. No. 55723-09
Document Date Yesterday’s date
Save the A/P Invoice.
A/P Invoice Number: _____________
2-3-1 Open the A/P invoice you just created to view the journal entry.
Fill in the table below based on information in the document:

Values
How much is the vendor
invoice?

2-3-1-1 View the journal entry to see the effect of the A/P invoice on
accounting.

Which field in the journal entry contains the vendor reference

number?
_______________________________________________

Which account was credited when the Goods Receipt PO was

created and is now debited when the A/P Invoice is saved?

_________________________________________________