Expenditure Cycle Overview

A collection of flashcards covering key terms and concepts related to the Expenditure Cycle, including ordering, receiving, and paying for goods.

Expenditure Cycle

A set of activities related to acquiring inventory and supplies in business operations.

Ordering Supplies

The process of requesting supplies, inventory, or services needed by a company.

Receiving Supplies

The activity of accepting and verifying the goods delivered to ensure they match the order.

Paying for Supplies

The process of settling accounts for the supplies and services received by a business.

Economic Order Quantity (EOQ)

A traditional inventory management approach aimed at minimizing total costs associated with ordering, holding, and stockouts.

Inventory Control Methods

Strategies to manage inventory levels effectively including Economic Order Quantity, Materials Requirements Planning, and Just-in-Time.

Just-in-Time Inventory

An inventory strategy that aims to reduce carrying costs by receiving goods only as they are needed in the production process.

Materials Requirements Planning (MRP)

A system used for forecasting demand and planning inventory purchases based on expected consumption.

Receiving Report

Documentation that lists items and quantities received, identifying the vendor and the purchase order for accounting purposes.

Purchase Order (PO)

A formal request to a vendor to deliver specified quantities of goods at predetermined prices.