Before a new supplier is added into the supplier master file (or the purchasing master file), the company should
A) conduct a credit check on the new supplier.
B) have the supplier detail matched against the invoice detail.
C) ask the purchasing manager to verify the authenticity of the supplier.
D) have the accounting department enter the necessary detail about the supplier.

Question

Quizplus · Accepted Answer

Conducting a credit check on the new supplier helps to determine their financial stability and creditworthiness. This reduces the risk of doing business with a supplier who may default on payment or go bankrupt. The other options listed are also important, but conducting a credit check is crucial for identifying potential financial risks.

Before a New Supplier Is Added into the Supplier Master