Chapter 4The Procurement Process

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: 2Section: Storage Location Practice:

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

Answer: False Difficulty: Easy Page Reference: 2Section: Storage Location Practice:

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

Answer: True Difficulty: Medium Page Reference: 2Section: Storage Location Practice:

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

Answer: False Difficulty: Difficult Page Reference: 3Section: 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: 4Section: 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: 4Section: Enterprise-Level Purchasing Organization Practice:

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

Answer: False Difficulty: Medium Page Reference: 4Section: Company -Level Purchasing Organization Practice:

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

Answer: True Difficulty: Medium Page Reference: 4Section: Enterprise-Level Purchasing Organization Practice:

9. A plant can belong to more than one company code.

Answer: False Difficulty: Medium Page Reference: 4Section: 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: 5Section: 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: 6Section: 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: 7Section: 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: 9Section: Vendor Master Practice:

14. The method used to value material is defined in the material master.

Answer: True Difficulty: Medium Page Reference: 8Section: Material Master Practice:

15. Different material types have different required material views.

Answer: True Difficulty: Medium Page Reference: 7Section: 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: 10Section: Vendor Master Practice:

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

Answer: False Difficulty: Easy Page Reference: 11Section: Vendor Master Practice:

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

Answer: True Difficulty: Medium Page Reference: 11Section: Vendor Master Practice:

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

Answer: False Difficulty: Medium Page Reference: 12Section: 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: 11Section: Vendor Master Practice:

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

Answer: True Difficulty: Easy Page Reference: 13Section: Item Categories Practice:

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

Answer: True Difficulty: Easy Page Reference: 14Section: 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: 16Section: 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: 17Section: Goods Movement Practice:

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

Answer: False Difficulty: Medium Page Reference: 18Section: Goods Movement Practice:

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

Answer: True Difficulty: Medium Page Reference: 18Section: Goods Movement Practice:

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

Answer: False Difficulty: Difficult Page Reference: 18Section: 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: 19Section: 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: 17Section: 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: 18Section: Goods Movement Practice:

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

Answer: False Difficulty: Easy Page Reference: 19Section: Goods Movement Practice:

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

Answer: False Difficulty: Medium Page Reference: 19Section: Goods Movement Practice:

33. Requirements for materials must be created manually.

Answer: False Difficulty: Difficult Page Reference: 21Section: 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: 22Section: Requirement Determination Practice:

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

Answer: False Difficulty: Medium Page Reference: 22Section: 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: 26Section: 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: 27Section: 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: 28Section: Order Processing Practice:

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

Answer: False Difficulty: Medium Page Reference: 29Section: 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: 36Section: 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: 32Section: 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: 33Section: Invoice Verification Practice:

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

Answer: True Difficulty: Easy Page Reference: 36Section: Invoice Verification Practice:

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

Answer: False Difficulty: Medium Page Reference: 37Section: Payment Processing Practice:

45. Electronic payments are sent automatically.

Answer: True Difficulty: Medium Page Reference: 38Section: 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: 41Section: Work Lists Practice: