Question

What is the procurement process?

1 A process in which a significant decline in payables as a percent of total assets may indicate completeness problems.

2 A process in which a significant increase in the current ratio compared to prior years' experience may indicate completeness problems.

3 A process that involves selecting vendors, establishing payment terms, negotiating contracts, purchasing goods, receiving goods, and recording of purchases and payment of liabilities.

4 The purchase returns process involving return of goods.

Answer 1

Procurement is a process which includes finding the type of goods which are required by us and the dealer or vendors from where the goods can be purchased.

Also after finding the vendor we have to establish the payment terms, negotiating any contracts and other terms and conditions with the vendor.

So the correct answer is 3 i.e. procurement is a process that involves selecting vendors, establishing payment terms, negotiating contacts, purchasing goods, receiving goods and recording of purchases and payment of liabilities.