Which documents should be matched to make sure that the invoice received relates to a valid order that was placed and that the goods were received? A. Purchase requisition, purchase order, and receiving report. B. Purchase order, receiving log, and invoice. C. Purchase requisition, receiving report, and statement. D. Purchase order, receiving report, and invoice. E. Purchase order, invoice, and inventory report.
The correct answer and explanation is:
Correct Answer: D. Purchase order, receiving report, and invoice
To ensure that an invoice received is valid, matches an authorized order, and reflects goods actually received, organizations use a process called three-way matching. This process involves comparing three key documents: the purchase order, the receiving report, and the invoice.
The purchase order (PO) is the document created by the buyer and sent to the vendor. It details the items requested, quantities, agreed prices, and delivery terms. This document is important because it serves as the official request for goods or services and provides a benchmark for later verification.
The receiving report is prepared by the receiving department when the goods arrive. It confirms what was actually delivered in terms of quantity and condition. This document ensures that the goods ordered were indeed received.
The invoice is sent by the vendor after delivery. It requests payment and includes details such as item descriptions, quantities, unit prices, and total amount due.
By matching these three documents, the organization ensures that:
- The goods or services were authorized (as per the PO)
- The goods or services were actually received (as per the receiving report)
- The vendor’s charges are accurate (as per the invoice)
This matching process helps to prevent payment for unordered items, duplicate payments, or incorrect pricing. It is a key internal control in accounts payable systems and reduces the risk of fraud and errors. While other documents like purchase requisitions or statements may be useful, they are not part of the core three-way match required for validating an invoice. Therefore, the correct match for this purpose is the purchase order, receiving report, and invoice.