Chapter 4

The Procurement Process

Multiple Choice Questions

1. Which one of the following is not a type of organizational data that is utilized in the
procurement process?

a. Client
b. Company Code
c. Storage Location
d. Purchasing Organization
e. Manufacturing Plant

2. What is a storage location?

a. The place where raw materials are received

b. The place within a plant where materials are kept until they are needed
c. The place where materials are collected for staging and inspection
d. The place within a plant where machines are installed for production purposes
e. The place within a plant where finished goods are kept for sale

3. Which organizational element(s) control(s) the entry of accounting data in the vendor
master?

a. Purchasing organization
b. Client
c. Company Code
d. Client and Company Code
e. Client and Purchasing Organization

4. A purchasing organization is involved in all of the following operations except

a. Negotiating contracts and agreements

b. Negotiating pricing with vendors
c. Evaluating and identifying vendors
d. Determining storage locations within the plant

5. Which one of the following is not a model of the purchasing organization?

a. Enterprise level
b. Company level
c. Client level
d. Plant level
e. Cross-plant
 6. Within the plant-level purchasing organization, also known as a plant-specific purchasing
Organization,

a. Each plant has its own purchasing organization

b. One purchasing organization is responsible for multiple plants
c. Only one purchasing organization for all plants
d. One purchasing organization is responsible for all company codes in the enterprise
e. Two or more purchasing organizations are responsible for each plant

7. A purchasing group is an individual or a group of individuals who are responsible for all of
the following except

a. Creating purchase requisitions

b. Negotiating contracts and agreements
c. Requesting quotations from vendors
d. Creating and monitoring purchase orders
e. Planning for material requirements

8. Which one of the following is not one of the data types that are relevant to the purchasing
process?

a. Material master
b. Vendor master
c. Sales master
d. Purchasing info records
e. Conditions

9. The key data in the purchasing view of the material master are

a. The purchasing organization, the goods receipt processing time, and the delivery
tolerances
b. The purchasing group, the goods receipt processing time, and the delivery
tolerances
c. The purchasing group, the invoice, and the delivery tolerances
d. The purchasing group, the material master, and the delivery tolerances
e. The price, the storage location, and the delivery date

10. Data in the vendor master are grouped into which three segments?

a. General data, storage data, and purchasing data

b. General data, storage data, and inventory data
c. Storage data, accounting data, and purchasing data
d. Storage data, accounting data, and pricing data
e. General data, accounting data, and purchasing data
11. General data in a vendor master contain all of the following except:

a. Name
b. Address
c. Communication
d. Payment terms and methods
e. Search term

12. Which of the following is an intersection or combination of material data and vendor data?

a. Condition type
b. Purchasing info record
c. Stock transfer
d. Third-party order
e. Search term

13. Which item category would you use to have your vendor ship goods directly to your
customer?

a. Consignment
b. Third-party
c. Stock transfer
d. Standard
e. Transfer posting

14. Materials that are acquired to be used within the organization are referred to as

a. Stock materials
b. Transfer materials
c. Vendor materials
d. Consumable materials
e. None of the above

15. Which of the following account assignment categories is used when the company acquires a
fixed asset?

a. Cost center
b. Asset
c. Order
d. Sales order
e. Project

16. Which of the following document types is not utilized during the Purchasing process?

a. Material documents
b. Fl documents
c. CO documents
d. Picking document
e. Invoice
17. A FI document includes a header and an items section. Which of the following data are
included in the items section?

a. Document number
b. Account
c. Storage location
d. Document date
e. Document currency

18. Which of the following statements about a plant is not true?

a. A plant can be assigned to more than one company code

b. A company code can have more than one plant
c. A plant is a key organizational element in purchasing
d. A plant can be assigned to only one company code
e. A plant must have at least one storage area

19. Which of the following goods movements need not involve a physical movement of
materials?

a. Goods receipt
b. Goods issue
c. Stock transfer
d. Transfer posting
e. None of the above (all involve physical movement of materials)

20. Which element of the requirements determination process involves creating the requisition?

a. Data
b. Task
c. Trigger
d. Outcomes
e. None of the above

21. A company can use which of the following to select a vendor from a list of potential
suppliers ?

a. Source list
b. Company code
c. Vendor master
d. Material master
e. None of the above

22. Which element of a purchase order includes communicating with the vendor?

a. Trigger
b. Data
c. Task
d. Outcome
e. None of the above
23. Which item is included in the header of a purchase order?

a. Order quantity
b. Vendor
c. Delivery date
d. Price
e. None of the above

24. SAP can utilize which of the following media to communicate with a vendor?

a. Web services
b. EDI
c. Fax
d. Print
e. All of the above

25. Which of the following is(are) a form of data within the goods receipt step?

a. Material ordered
b. Quantity delivered
c. Verification
d. Storage location
e. All of the above

26. Which of the following is a form of invoice verification?

a. Three-way match
b. Quality management
c. Inspection lot
d. Warehouse management
e. None of the above

27. Which element of the payment step includes selecting a bank?

a. Trigger
b. Data
c. Outcome
d. Task
e. None of the above
 28. Which of the following facilitates the integration between vendor master data and financial
accounting?

a. Vendor account number

b. Reconciliation account
c. Accounts payable number
d. Material number
e. Accounts receivable number

29. Purchasing information systems are a component of which system?

a. Logistics information systems

b. Business intelligence systems
c. Financial information systems
d. Human resource information systems

Multiple Answer Questions

1. Which of the following are organizational elements in purchasing?

a. Shipping point
b. Company code
c. Vendors
d. Materials
e. Plant

Answer: b, e Difficulty: Easy Page Reference: 2

Section: Organizational Data Practice:

2. Which of the following statements about storage locations are true?

a. A storage location must be assigned to a plant

b. A storage location can be assigned to more than one plant
c. A client can have more than one storage location
d. A plant can have more than one storage location
e. A storage location can hold only materials with a stock status of unrestricted use

Answer: a, c, d Difficulty: Medium Page Reference: 2

Section: Storage Location Practice: Yes
3. Which of the following are organizational elements in purchasing?

a. Sales organization
b. Purchasing area
c. Plant
d. Vendor
e. Storage location

Answer: c, e Difficulty: Easy Page Reference: 3

Section: Storage Location Practice:

4. Which of the following statements about purchasing organizations are correct?

a. They negotiate conditions of purchase with vendors

b. They can purchase only for one company
c. They can purchase for multiple plants
d. They can purchase for multiple plants, but they must be within the same company
code
e. They identify a buyer or a group of buyers

Answer: a, c Difficulty: Medium Page Reference: 3

Section: Purchasing Organization Practice:

5. A purchase order can be sent to which of the following?

a. A vendor
b. A customer
c. A plant
d. A purchasing organization
e. A purchasing group

Answer: a, c Difficulty: Easy Page Reference: 6

Section: Purchasing Group Practice:

6. Data for source determination are obtained from:

a. A purchase order
b. Purchase info records
c. A source list
d. Contracts and agreements
e. The vendor master record

Answer: b, c, d Difficulty: Medium Page Reference: 6

Section: Purchasing Organization Practice:
 7. Which of the following are master data that are related to the purchasing process?

a. Material master
b. Vendor master
c. Vendor info records
d. Purchasing organization
e. Customer master

Answer: a, b, c Difficulty: Medium Page Reference: 7

Section: Master Data Practice: Yes

8. Which of the following are methods of valuing materials?

a. Actual price
b. Standard price
c. Purchasing price
d. Moving (average) price
e. Selling price

Answer: b, d Difficulty: Difficult Page Reference: 8

Section: Material Master Practice:

9. Which G/L accounts are impacted by the goods receipt step of the procurement process?

a. Accounts payable
b. Goods receipt / invoice receipt account
c. Inventory account
d. Vendor account
e. Band account

Answer: b, c Difficulty: Difficult Page Reference: 32

Section: Goods Receipt Practice:

10. Which G/L accounts are impacted by the invoice verification step of the procurement
process?

a. Accounts payable
b. Goods receipt / invoice receipt account
c. Inventory account
d. Vendor account
e. Bank account

Answer: a, b, d Difficulty: Difficult Page Reference: 36

Section: Invoice Verification Practice:
11. Which of the following data categories are included in a purchasing info record?

a. Freight
b. Discounts
c. Material number
d. Vendor address
e. Texts

Answer: a, b, e Difficulty: Easy Page Reference: 12

Section: Purchasing Info Records Practice:

12. Data from which of the following sources are automatically included in a purchase order?

a. Vendor info record

b. Purchasing info record
c. Material master
d. Vendor master
e. Purchasing organization

Answer: b, c, d Difficulty: Medium Page Reference: 12

Section: Purchasing Info Records Practice:

13. Which of the following are material types?

f. Consumable material
g. Raw material
h. Packaging
i. Consignment material
j. Non-valuated material

Answer: a, b, c, e Difficulty: Medium Page Reference: 14

Section: Account Determination Practice:

14. Which of the following are account assignment categories?

f. Asset
g. Order
h. Cost center
i. Sales order
j. Project

Answer: a, b, c, d, e Difficulty: Easy Page Reference: 15

Section: Account Determination Practice: Yes
15. Materials designated as __________ can be withdrawn only for sampling or for scrap.

a. Goods movement
b. In-quality inspection
c. Blocked stock
d. Material document
e. Purchase info record

Answer: b, c Difficulty: Medium Page Reference: 17

Section: Stock Type or Status Practice:

16. Material documents consist of a header and an items section. Which of the following are
included in the items section?

a. Document number
b. Movement type
c. Material number
d. Storage location
e. Document date

Answer: b, c, d Difficulty: Medium Page Reference: 18

Section: Goods Movement Practice: Yes

17. A purchase order can be created with reference to which of the following?

a. Purchase order
b. Purchase requisition
c. Purchase info record
d. RFQ
e. Sales order

Answer: a, b, d Difficulty: Medium Page Reference: 25

Section: Order Processing Practice: Yes

18. Which of the following are consequences of the goods receipt step in the procurement
process?

a. A material document is created

b. An accounting document is created
c. The purchase order history is updated
d. The document flow is updated
e. The material master is updated

Answer: a, b, c, e Difficulty: Difficult Page Reference: 30

Section: Goods Receipts Practice: Yes
19. Which of the following are key documents in purchasing?

f. Material documents
g. Fl documents
h. CO documents
i. Purchase order
j. Invoice

Answer: a, b, c, d, e Difficulty: Easy Page Reference: 21

Section: Process Practice:

20. Which of the following organizational data are required when creating a purchase
requisition?

a. Sales organization
b. Company code
c. Storage location
d. Purchasing organization
e. Purchasing group

Answer: b, d, e Difficulty: Easy Page Reference: 22

Section: Requirement Determination Practice:

21. Which steps are involved in converting a purchase requisition into a purchase order?

a. Source list
b. Outline purchase agreement
c. Storage location
d. Request for quotation
e. Quotation

Answer: d, e Difficulty: Medium Page Reference: 24

Section: Source of Supply Determination Practice:

22. Which of the following organizational data are required when creating a purchase order?

a. User input
b. Purchase Requisition
c. RFQ
d. Quotation
e. Purchase order

Answer: b, c, d, e Difficulty: Medium Page Reference: 25

Section: Order Processing Practice:
23. Which transaction documents are included in a purchase order?

f. Requisition
g. RFQ
h. Quotation
i. Conditions
j. Vendor

Answer: a, b, c Difficulty: Medium Page Reference: 26

Section: Order Processing Practice:

24. SAP can utilize which of the following forms of media to communicate with a vendor?

a. Print
b. E-mail
c. EDI
d. Web services
e. Fax

Answer: a, b, c, d, e Difficulty: Medium Page Reference: 28

Section: Oder Processing Practice:

25. What are the key stock types (statuses) utilized in purchasing, based on usability of
materials?

a. Unrestricted use
b. Stock in transit
c. Stock on order
d. Stock in storage
e. Blocked stock

Answer: a, b, e Difficulty: Medium Page Reference: 31

Section: Goods Receipt Practice:

26. Which of the following documents are required for the invoice verification step of the
procurement process?

a. Vendor invoice
b. Purchase requisition
c. Purchase order
d. Material document
e. Material master

Answer: a, c, d Difficulty: Medium Page Reference: 34

Section: Invoice Verification Practice:
27. Which of the following are consequences of the invoice verification step of the procurement
process?

a. A material document is created

b. An accounting document is created
c. The purchase order history is updated
d. G/L accounts are updated
e. The sales order is updated

Answer: b, d, c Difficulty: Difficult Page Reference: 34

Section: Invoice Verification Practice: Yes

28. Which of the following data are needed for invoice verification?

a. Company code
b. Purchase order
c. Material document
d. Invoice
e. User input

Answer: b, c, d, e Difficulty: Medium Page Reference: 35

Section: Invoice Verification Practice:

29. Which of the following tasks are performed during the payment step?

a. Selecting method of payment

b. Updating master data
c. Selecting invoice items
d. Verifying an invoice
e. Calculating the payment amount

Answer: a, c, e Difficulty: Medium Page Reference: 37

Section: Payment Processing Practice:

30. To complete a vendor payment, which of the following types of data must be included on the
vendor master?

a. Payment terms
b. Payment method
c. Date
d. Payment address
e. Amount

Answer: a, b, d Difficulty: Medium Page Reference: 37

Section: Payment Processing Practice:
 31. Which organizational processes interact with procurement?

a. Project management
b. Material planning
c. Fulfillment (sales)
d. Management accounting
e. Financial accounting

Answer: a, b, c, d, e Difficulty: Medium Page Reference: 40

Section: Integration with Other Processes Practice:

32. Standard reporting tools in the transaction system are used to generate which of the
following?

a. Picking lists
b. Online lists
c. Work lists
d. Inventory lists

Answer: b, c Difficulty: Medium Page Reference: 40

Section: Reporting Practice: Yes

True-False Questions

1. Storage locations are places within a plant were materials are kept until they are needed.

Answer: True Difficulty: Easy Page Reference: 2

Section: Storage Location Practice:

2. There can only be one storage location within a plant .

Answer: False Difficulty: Easy Page Reference: 2

Section: Storage Location Practice:

3. A storage location is a key organizational element in purchasing.

Answer: True Difficulty: Medium Page Reference: 2

Section: Storage Location Practice:

4. A purchasing organization is involved only in negotiating prices with vendors

Answer: False Difficulty: Difficult Page Reference: 3

Section: Purchasing Organization Practice:
 5. Typically, there are three models of purchasing organizations: enterprise-level, company-
level, and plant-level.

Answer: True Difficulty: Medium Page Reference: 4

Section: Purchasing Organization Practice:

6. The enterprise‐level purchasing organization is also known as the cross‐company code

purchasing organization.

Answer: True Difficulty: Medium Page Reference: 4

Section: Enterprise-Level Purchasing Organization Practice:

7. The company-level purchasing organization is the most centralized model.

Answer: False Difficulty: Medium Page Reference: 4

Section: Company -Level Purchasing Organization Practice:

8. The enterprise-level purchasing organization is the most centralized model.

Answer: True Difficulty: Medium Page Reference: 4

Section: Enterprise-Level Purchasing Organization Practice:
9. A plant can belong to more than one company code.

Answer: False Difficulty: Medium Page Reference: 4

Section: Company-Level Purchasing Organization Practice:

10. The most decentralized model of purchasing organizations is the plant‐specific purchasing
organization.

Answer: True Difficulty: Easy Page Reference: 5

Section: Plant-Level Purchasing Organization Practice:

11. A purchasing group is an internal group that is responsible for executing the procurement
process.

Answer: False Difficulty: Medium Page Reference: 6

Section: Purchasing Group Practice:

12. A purchasing organization is an individual or a group of individuals who are responsible for
purchasing activities for a material or group of materials.

Answer: False Difficulty: Medium Page Reference: 7

Section: Purchasing Group Practice:

13. Vendor master data include the data needed to conduct business with a vendor and to execute
transactions related to the procurement process.

Answer: True Difficulty: Medium Page Reference: 9

Section: Vendor Master Practice:
14. The method used to value material is defined in the material master.

Answer: True Difficulty: Medium Page Reference: 8

Section: Material Master Practice:

15. Different material types have different required material views.

Answer: True Difficulty: Medium Page Reference: 7

Section: Material Master Practice:

16. General data related to a vendor are accessible to all company codes in a client.

Answer: True Difficulty: Easy Page Reference: 10

Section: Vendor Master Practice:

17. Purchasing data related to a vendor are accessible to all purchasing organizations.

Answer: False Difficulty: Easy Page Reference: 11

Section: Vendor Master Practice:

18. Material master data can be defined differently for different organizational levels.

Answer: True Difficulty: Medium Page Reference: 11

Section: Vendor Master Practice:

19. A purchasing info record is an intersection or combination of material and accounting data.

Answer: False Difficulty: Medium Page Reference: 12

Section: Purchasing Info Record Practice:

20. Accounting data related to a vendor are accessible to all clients in a company code.

Answer: False Difficulty: Medium Page Reference: 11

Section: Vendor Master Practice:

21. Item categories in a purchase order determine the process steps used to procure materials.

Answer: True Difficulty: Easy Page Reference: 13

Section: Item Categories Practice:

22. Consumable materials are acquired to be used within an organization.

Answer: True Difficulty: Easy Page Reference: 14

Section: Account Determination Practice:

23. When purchasing consumable materials, an account assignment category and specific
account assignment objects must be provided when the purchase order is created.

Answer: True Difficulty: Medium Page Reference: 16

Section: Account Determination Practice:
24. A goods movement is not required when changing the status of material from “in quality
inspection” to “unrestricted use”.

Answer: False Difficulty: Difficult Page Reference: 17

Section: Goods Movement Practice:

25. A plant-to-plant movement of goods does not generate an accounting document.

Answer: False Difficulty: Medium Page Reference: 18

Section: Goods Movement Practice:

26. A goods receipt cannot be accomplished without a movement type.

Answer: True Difficulty: Medium Page Reference: 18

Section: Goods Movement Practice:

27. A stock transfer does not involve a change in storage location.

Answer: False Difficulty: Difficult Page Reference: 18

Section: Goods Movement Practice:

28. A transfer posting changes the stock status of a material and need not involve a physical
movement of goods.

Answer: True Difficulty: Easy Page Reference: 19

Section: Goods Movement Practice:

29. A goods movement is a transaction that causes a change in stock value or status.

Answer: True Difficulty: Medium Page Reference: 17

Section: Goods Movement Practice:

30. Materials cannot be moved from one company code to another because each company code
uses a different set of books.

Answer: False Difficulty: Difficult Page Reference: 18

Section: Goods Movement Practice:

31. A transfer posting is used to move materials from one storage location to another.

Answer: False Difficulty: Easy Page Reference: 19

Section: Goods Movement Practice:

32. A transfer posting does not generate a material document.

Answer: False Difficulty: Medium Page Reference: 19

Section: Goods Movement Practice:
33. Requirements for materials must be created manually.

Answer: False Difficulty: Difficult Page Reference: 21

Section: Requirement Determination Practice:

34. The data needed to create a purchase requisition are the item category, quantity, desired
delivery date, and desired delivery location or receiving plant.

Answer: True Difficulty: Medium Page Reference: 22

Section: Requirement Determination Practice:

35. A requisition represents a legal obligation to make the purchase.

Answer: False Difficulty: Medium Page Reference: 22

Section: Requirement Determination Practice:

36. The header section of a purchase order contains information such as purchase order number,
vendor, currency, dates, and payment terms.

Answer: True Difficulty: Medium Page Reference: 26

Section: Order Processing Practice:

37. The primary task of the order processing step is to create and send the purchase order to the
vendor.

Answer: True Difficulty: Easy Page Reference: 27

Section: Order Processing Practice:

38. SAP cannot utilize any media except Web services to communicate a purchase order to a
vendor.

Answer: False Difficulty: Easy Page Reference: 28

Section: Order Processing Practice:

39. Materials ordered in multiple purchase orders must be delivered in multiple shipments.

Answer: False Difficulty: Medium Page Reference: 29

Section: Goods Receipt Practice:

40. The material master is updated after the invoice verification step of the procurement process
has been completed.

Answer: True Difficulty: Easy Page Reference: 36

Section: Invoice Verification Practice:

41. The material master is updated after the goods receipt step of the procurement process has
been completed.

Answer: True Difficulty: Difficult Page Reference: 32

Section: Goods Receipt Practice:
42. Tolerances for price variations among purchase orders, invoices, and goods receipts are
allowed, but tolerances for quantity variances are not.

Answer: False Difficulty: Difficult Page Reference: 33

Section: Invoice Verification Practice:

43. Invoice verification authorizes payment of the invoice to the vendor.

Answer: True Difficulty: Easy Page Reference: 36

Section: Invoice Verification Practice:

44. Payments must be made automatically through a payment program.

Answer: False Difficulty: Medium Page Reference: 37

Section: Payment Processing Practice:

45. Electronic payments are sent automatically.

Answer: True Difficulty: Medium Page Reference: 38

Section: Payment Processing Practice:

46. Work lists display lists of master data and documents that are generated during the execution
of a process.

Answer: False Difficulty: Difficult Page Reference: 41

Section: Work Lists Practice: