Which three statements are true for an expense destination transfers that does NOT require a receipt at destination inventory organization?

Question

Options

• AThere is no cost associated to the transaction.
• BThere is no put away transaction in Inventory since the item is expensed.
• CA receipt is required on interorganization expense destination transfer orders between the from
• DThe transfer order is considered received and delivered at the time of shipment.
• EThe destination inventory is not incremented.

Explanation

Options B, D, and E are the three correct statements.

When an expense destination transfer does not require a receipt, the system treats the shipment event as the completion of the transfer. At the moment of shipment, the transfer order is automatically considered both received and delivered (D), which means no separate receiving step occurs at the destination. Because the item is expensed - not stocked - there is no put away transaction in inventory (B), and the destination organization's on-hand inventory balance is never incremented (E).

Why the distractors are wrong:

• A is false because cost absolutely exists; it is charged to an expense account at shipment. The transaction has financial impact, just not an inventory valuation impact.
• C is false in this scenario - the entire premise of the question is that a receipt is not required, so stating one is required contradicts the setup.

Memory tip: Think of "expense destination, no receipt" as a one-step transfer - ship it and it's done. The three truths follow from that: it auto-delivers at shipment (D), nothing goes to a bin (B), and the inventory counter never ticks up (E). If you remember "gone at the dock," you can reconstruct B, D, and E on exam day.

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