CAF-8 · Chapter 6 · Question 2 of 10
During a walkthrough of the purchases system, you note that goods are recorded in the accounting system purely based on the supplier's invoice rather than the Goods Received Note (GRN). What is the primary risk of this practice?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) The company may pay for goods that it has not actually received.
Explanation
If liabilities and inventory are recorded solely based on the supplier's invoice without matching it to a GRN, the company risks recording and paying for fictitious or unfulfilled orders. A three-way match (PO, GRN, and Invoice) is essential.
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