What do purchase agreements override in terms of pricing?

What do purchase agreements override in terms of pricing?

• A. Only the item master
• B. Both item/supplier record and item master
• C. Requisition order prices
• D. Supplier invoices

Answer: (B)

Purchase agreements are essential in establishing the pricing and terms for purchasing items from suppliers. They serve as a formal understanding between the buyer and the supplier about the price, quantity, and other conditions for the transaction. Specifically, they override both the item master and the item/supplier record. The item master contains basic details about products, including standard pricing. The item/supplier record adjusts this pricing based on specific agreements with particular suppliers. When purchase agreements are in place, they take precedence over these existing pricing structures to ensure that the prices specified in the agreements are honored. This ensures consistency in pricing during procurement processes and allows for greater financial predictability and adherence to negotiated terms. Thus, the correct answer reflects that purchase agreements override both the item/supplier record and the item master.

Purchase agreements are essential in establishing the pricing and terms for purchasing items from suppliers. They serve as a formal understanding between the buyer and the supplier about the price, quantity, and other conditions for the transaction. Specifically, they override both the item master and the item/supplier record.

The item master contains basic details about products, including standard pricing. The item/supplier record adjusts this pricing based on specific agreements with particular suppliers. When purchase agreements are in place, they take precedence over these existing pricing structures to ensure that the prices specified in the agreements are honored. This ensures consistency in pricing during procurement processes and allows for greater financial predictability and adherence to negotiated terms. Thus, the correct answer reflects that purchase agreements override both the item/supplier record and the item master.