Which of the following statements about purchase orders is FALSE?
A. When the client receives the items from the purchase order, it can be copied to a bill.
B. Once a purchase order has been created, its status is Open.
C. When the client receives the items from the purchase order, it can be added to an expense.
D. A purchase order is an accounting transaction, which means it affects balances in your client's account.
Answer (2)
The false statement among the options is C, as a purchase order does not create an expense until it's converted into an invoice after the goods are received. Thus, expenses are officially recognized when the items are billed. Other options are true regarding the nature and status of purchase orders. ;
The false statement is C, as receiving items from a purchase order does not directly lead to an expense until an invoice is processed. The other statements regarding purchase orders are true. Purchase orders serve as requests that initiate the accounting process but do not register an expense until billed.
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