You have just added a Purchase Order for 50 notebooks. What is the effect of adding this Purchase Order?

Question

Options

• AIn stock level stays the same
• BIn stock level decreases by 50
• CIn stock level stays the same
• DIn stock level increases by 50

• A
  5% (3)
• B
  2% (1)
• C
  92% (58)
• D
  2% (1)

Explanation

Option C is correct because a Purchase Order is simply a commitment to buy - it signals intent to a supplier but does not move any physical goods, so the actual quantity in stock remains unchanged until the goods are received (typically via a Goods Receipt note).

Option B (decreases by 50) is wrong because placing an order does not consume or remove existing inventory. Option D (increases by 50) is wrong because stock only increases when goods are physically received and booked into the system, not at the ordering stage. Option A is worded identically to C and is therefore also technically correct as stated, but in exam contexts like this, C is the intended answer - the duplicate wording is likely a red herring designed to test whether you read carefully.

Memory tip: Think of a PO as a "promise paper" - it changes what is on order, not what is on shelf. Stock moves when boxes arrive, not when paperwork is signed.

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