The document used by purchasers to accept a vendor's price is called a what?

• A. Delivery invoice
• B. Quotation
• C. Purchase order
• D. Receiving report

Answer: (A)

Understanding how a price becomes binding in purchasing hinges on who confirms the offer. The document the buyer uses to accept a vendor’s price is the purchase order. When a vendor submits a price in a quotation, the buyer reviews it and, if acceptable, issues a purchase order to authorize the purchase at that price, specifying quantity, delivery terms, and other conditions. This purchase order signs off on the vendor’s price and creates a binding agreement to buy. A delivery invoice comes after delivery to request payment, not to accept price. A quotation is the price offer from the vendor, not the buyer’s acceptance document. A receiving report is used to record goods received, not to accept a price.