Which is the correct sequence for the inventory workflow from purchase order to payment?

• A. Enter Bill; Pay Bills; Receive Inventory; Prepare PO
• B. Prepare PO; Enter Bill; Pay Bills; Receive Inventory
• C. Receive Inventory; Prepare PO; Pay Bills; Enter Bill Against Inventory
• D. Prepare purchase order for inventory; Receive the shipment; Enter Bill Against Inventory; Pay the bill.

Answer: (D)

The sequence follows the natural flow from planning to payment while keeping inventory values accurate. Start with preparing a purchase order to document the intention to buy and to set expectations with the vendor. Then receive the shipment to update actual inventory levels before creating any liability. Entering the bill against inventory records the amount owed and ties the liability to the goods received, ensuring the inventory value reflects what was actually received. Finally, pay the bill to settle the liability. This order avoids recording a payable before goods exist, and it keeps inventory quantities and costs aligned with real receipt. Other sequences either bill before receipt or misplace the receiving step, which can lead to mismatches in inventory records and payables.