ACCA Audit and Assurance (F8) Practice Exam

What is one of the key responsibilities related to credit claims in the purchase process?

1. Documenting expenses accurately

2. Reviewing supplier payment term agreements

3. Recording liabilities for goods received accurately

4. Ensuring budget adherence

The correct answer is: Recording liabilities for goods received accurately

Recording liabilities for goods received accurately is crucial because this responsibility directly impacts the financial statements of an organization and ensures that the accounts payable reflect the true obligations to suppliers. When goods are received, the organization incurs a liability, typically recorded in the accounts payable. Accurate recording ensures that the financial position of the company is truthful and complies with accounting standards, which require that liabilities are recognized when they are incurred. This process safeguards the organization against potential cash flow issues that may arise if the liabilities are understated. It is integral to maintaining accurate records for both financial reporting and effective cash management. Proper documentation of liabilities ensures that the company is prepared to settle its obligations to suppliers promptly and accurately, which can help to maintain supplier relationships and avoid issues with credit claims.