Q6: Purchasing System – Northern Manufacturing Co.
Required:
a. Identify all documents which are used in Northern Manufacturing Co.
Purchasing system and explain the purpose of each document.
1. Purchases requisition forms- A purchase requisition is a form filled out by an employee,
who requests that the purchasing department procure certain goods or services. The form
includes information on the nature and quantity of the goods to be procured, and when
required. In some organizations, department managers must also sign purchase requests
made by their staff, to show that they have obtained permission. By doing so, the company
can avoid making unnecessary purchases. The form is then sent to the purchasing
department, which procures the requested goods, this is done with the purchase order, which
is a legally binding document sent to the relevant supplier.
2. Purchase orders- A purchase order (PO) is a written sales contract between a buyer and a
seller detailing the exact goods or services to be provided from one vendor. It will specify the
terms of payment, date of delivery, identification of goods, quantity, terms of delivery, and all
other obligations and conditions.
3. Debit Note- A Debit Note is a document used by the seller to inform the buyer of the current
