Accounting, Payroll & Pension Issues/A/P

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Question
Hi Arthur,
I have a few questions re: a confusing A/P test and what is done in practice vs. theory. Although I received my acct degree many decades ago, I feel unprepared to excel on these detailed tests. I have "done my homework" to find the answers so I do not wish to insult you. I simply cannot find definitive answers and am putting great effort into my job search.

1. Is there such a thing as a "non-standard PO", defined as having specific terms and conditions but date, quantity, and amt are not specified?  My instinct says no.
2. If a packing slip shows a shortage, does the A/P dept really return the package to sender? I thought they would short pay to match the packing slip.
I appreciate your help.

Answer
Consider the purpose of a purchase order. A purchase order is a document is used by a buyer to describe an offer to purchase a specified amount of product at a particular price. If there were no amount, price, I do not think the document would be considered a purchase order.

If the receiving department finds a shortage compared with what is on the packing slip, then the receiving department needs to be instructed whether to not accept delivery or whether to allow reciept with the descrepancy noted.

The A/P department then needs to contact the supplier. The supplier may choose to makeup the difference or to have the invoice balanced reduced.

I would not expect the A/P department to do anything without discussion with the supplier.

Accounting, Payroll & Pension Issues

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Arthur Naman

Expertise

General accounting and bookkeeping questions. Specific questions pertaining to: monthly bookkeeping, preparing financial reports; reconciling accounts.

I cannot answer questions pertaining to pension or retirement planning.

This is not a forum to have homework answered. Please do your own homework.

Experience

30 years' experience doing tax and accounting work

Education/Credentials
MPA from Univ. of Texas at Austin, MBA Golden Gate Univ, San Francisco CA

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