Audit and Assurance Practice Exam

Which of the following activities is not associated with the acquisition and payment cycle?

1. Receive a customer purchase order

2. Process supplier invoices

3. Make payments to vendors

4. Review purchasing contracts

The correct answer is: Receive a customer purchase order

The activity associated with receiving a customer purchase order does not belong to the acquisition and payment cycle because this cycle primarily involves activities related to the procurement of goods and services from suppliers and the subsequent payments for those acquisitions. The acquisition and payment cycle focuses on establishing relationships with vendors, processing their invoices, making payments, and managing purchasing agreements. Receiving a customer purchase order pertains more to the sales cycle rather than the acquisition and payment cycle. In this context, it reflects the process of a business selling goods to customers, where the order is initiated by the customer rather than the organization acquiring products or services. On the other hand, processing supplier invoices, making payments to vendors, and reviewing purchasing contracts are all integral steps in managing purchases and settling accounts with suppliers, aligning with the functions of the acquisition and payment cycle.