Purchasing – Exercises
Unit: Purchasing-A/P Topic: Purchase Order to Payment
At the conclusion of this exercise, you will be able to: 1* Perform the steps of the purchasing process from purchase order to payment. 2* Understand the effect of each purchasing document on inventory and accounting.
In this exercise, you create a purchase order, a goods receipt PO, an A/P invoice and an outgoing payment. At each step you review the effects on inventory and accounting. In the optional section of the exercise, you go through a more complicated scenario where you create a purchase order for required items that include an item that has never been ordered before. You create an item master record for the new item. 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. .
2-1 You want to understand the documents in the purchasing process and their effects on the areas of accounting and inventory. You will follow the steps of the purchasing process from purchase order to payment.
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. Reopen the purchase order and open the row details to find the warehouse assigned. What is the warehouse assigned to the item? ______2.1.3 Check the stock level currently found in that warehouse. What is the current stock for the item in the 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? ______
What is the current stock level for the item?
______
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 postings that were created automatically because the system is using perpetual inventory?
______
______
Return to the goods receipt PO.
2-3 The vendor’s 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 vendor’s invoice into the appropriate fields. Field Name or Data Type Values Vendor Ref. No. 55723-09 Document Date Yesterday’s date
A/P Invoice Number: ______Save the A/P Invoice. 2-3-1 Open the A/P invoice you just created and view the relationship map. Fill in the table below based on information in the document:
Values What is the journal entry number? What additional information is available in this view?
2-3-1-1 Open the journal from the relationship map to view additional information.
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?
______
2-4 Pay the vendor’s invoice. Then return to the invoice to view the relationship map.
Field Name or Data Type Values Code V20000 Post the payment. Return to the A/P invoice and open the relationship map. Which view shows you the outgoing payment?
______2-5 This is an optional exercise for the procurement process that includes creating an item master and creating multiple goods receipt POs for one purchase order.
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. 2-5-1 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 Before you enter an external hard 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 External Hard 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!
2-5-2 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!
2-5-3 What payment terms does the system suggest? How did it determine these? ______
2-5-4 Add the purchase order. Purchase Order Number: ______Choose OK. 2.6 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 2-6-1 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: ______2-6-2 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
2-6-3 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. 2-6-4 V10000 sends you an invoice for the above deliveries with the invoice number of 00125/04. Enter an A/P invoice in the system to represent the vendor’s request for payment.
Field Name or Data Type Values Vendor V10000 Posting Date Today’s date Vendor Ref. No. 00125/04 2-6-5 Record all the items, referring to the two deliveries when you enter the invoice. Post the invoice to the system. A/P Invoice Number: ______2-6-6 View the relationship map from the original purchase order.