Requisition

Requisition Purchase Requisition Materials Requisition Manufacturing Requisition Production Order Internal Communication
A requisition is a formal request or instruction issued within an organization, asking a specific department or individual to perform an action, such as purchasing materials or initiating a production process.
On this page

What is a Requisition?

A requisition is a formal document or an electronic form used by organizations to request that a specific task be executed or a specific product or service be obtained. It typically includes detailed information about the requested item or service, the required quantity, the date by which it is needed, and the department or person requesting it.

Types of Requisitions

  1. Purchase Requisition: An internal document used to request the procurement of goods or services.
  2. Materials Requisition: An internal document used in manufacturing to request raw materials necessary for production.
  3. Manufacturing Requisition: Used to initiate or authorize the production of goods within an organization.

Examples of Requisitions

  • Example 1: A Purchase Requisition for new office supplies.

    • Requested By: Marketing Department
    • Items Requested: Notebooks, pens, and printer ink
    • Quantity: 50 notebooks, 100 pens, 10 ink cartridges
    • Needed By: Next Monday
    • Approved By: Department Head

  • Example 2: A Materials Requisition for a production line.

    • Requested By: Production Supervisor
    • Items Requested: Aluminum sheets, welding rods
    • Quantity: 500 sheets, 200 rods
    • Needed By: End of the month
    • Approved By: Operations Manager

  • Example 3: A Manufacturing Requisition for producing a batch of widgets.

    • Requested By: Product Line Manager
    • Item to be Produced: ABC Widgets
    • Quantity: 1000 units
    • Start Date: Immediate
    • Completion Date: Next week
    • Approved By: Plant Manager

Frequently Asked Questions

Q: Who is responsible for approving a requisition? A: Typically, a requisition must be approved by a managerial-level employee or a department head before the request can be fulfilled.

Q: Can a requisition be modified after approval? A: Modifications to a requisition after approval usually require re-approval from the same or higher authority to ensure compliance and oversight.

Q: What information is commonly included in a requisition form? A: A requisition form typically includes the requesting department, date, items or services requested, quantities, required by date, purpose, and approval signatures.

Q: How does a Purchase Requisition differ from a Purchase Order? A: A Purchase Requisition is an internal document requesting the purchase, whereas a Purchase Order is an external document issued to a supplier to procure the requested items or services.

  • Purchase Order (PO): A document issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services.
  • Production Order: A document used in manufacturing that specifies the start of production for a certain period or quantity.
  • Bill of Materials (BOM): A comprehensive list of raw materials, components, and assemblies required to build or manufacture a product.

Online References

Suggested Books for Further Studies

  1. “Accounting for Managers: Interpreting Accounting Information for Decision-Making” by Paul M. Collier
  2. “Cost Accounting: A Managerial Emphasis” by Charles T. Horngren, Srikant M. Datar, and Madhav V. Rajan
  3. “Financial and Managerial Accounting” by Jan R. Williams, Susan F. Haka, Mark S. Bettner, and Joseph V. Carcello
  4. “Management Control Systems” by Robert N. Anthony and Vijay Govindarajan

Accounting Basics: “Requisition” Fundamentals Quiz

### What is the primary purpose of a requisition form in an organization? - [x] To formally request the execution of a specific task or procurement of goods/services - [ ] To conduct a financial audit - [ ] To hire new employees - [ ] To generate a monthly financial report > **Explanation:** A requisition form is primarily used to formally request the execution of a specific task or the procurement of goods and services within an organization. ### Who typically approves a requisition? - [x] A managerial-level employee or department head - [ ] A newly hired intern - [ ] Any employee who notices the requisition - [ ] A third-party vendor > **Explanation:** Requisitions generally require the approval of a managerial-level employee or a department head to ensure that the request is valid and within budget. ### Which of the following is NOT a type of requisition? - [ ] Purchase Requisition - [ ] Materials Requisition - [ ] Manufacturing Requisition - [x] Marketing Requisition > **Explanation:** While purchase, materials, and manufacturing requisitions are common types, a "Marketing Requisition" is not typically referred to in standard accounting practices. ### What information is typically NOT included in a requisition form? - [ ] The items or services requested - [ ] The quantity of items or services - [ ] The required by date - [x] The financial performance of the organization > **Explanation:** A requisition form usually includes details such as items or services requested, quantities, and required by date, but not the financial performance of the organization. ### How does a Purchase Order differ from a Purchase Requisition? - [ ] They are the same document. - [ ] A Purchase Order is internal, and a Purchase Requisition is external. - [x] A Purchase Order is sent to a supplier; a Purchase Requisition is an internal request. - [ ] A Purchase Order requires higher-level approval than a Purchase Requisition. > **Explanation:** A Purchase Requisition is an internal request for goods or services, while a Purchase Order is a document sent to a supplier to procure the requested goods or services. ### Can requisitions be modified after approval? - [x] Yes, with re-approval from the appropriate authority. - [ ] No, they are final. - [ ] Yes, by any employee. - [ ] No, they must be canceled and re-issued. > **Explanation:** Modifications to approved requisitions usually require re-approval from the same or higher authority to maintain oversight and compliance. ### What is a Materials Requisition primarily used for? - [ ] To hire personnel - [ ] To audit financial statements - [x] To request raw materials for production - [ ] To announce company events > **Explanation:** A Materials Requisition is primarily used to request raw materials necessary for the production process within a manufacturing context. ### Which department typically initiates a Manufacturing Requisition? - [ ] Human Resources - [ ] Marketing - [x] Production - [ ] Legal > **Explanation:** A Manufacturing Requisition is typically initiated by the Production department to authorize the start of manufacturing goods. ### What is a common purpose of a Purchase Requisition? - [x] To request the procurement of goods or services - [ ] To redistribute financial resources - [ ] To track employee performance - [ ] To calculate depreciation > **Explanation:** A Purchase Requisition is commonly used to request the procurement of goods or services within an organization. ### Which term is related to various types of requisitions used within an organization? - [ ] Auditing - [ ] Taxation - [x] Procurement - [ ] Marketing > **Explanation:** Procurement is closely related to various types of requisitions—such as purchase, materials, and manufacturing requisitions—as they often involve requesting and acquiring goods and services.

Thank you for embarking on this journey through our comprehensive accounting lexicon and tackling our challenging sample exam quiz questions. Keep striving for excellence in your financial knowledge!

Tuesday, August 6, 2024
RES (Latin for 'thing')
Required Rate of Return (RRR)
Production Order January 1, 1

Accounting Terms Lexicon

Discover comprehensive accounting definitions and practical insights. Empowering students and professionals with clear and concise explanations for a better understanding of financial terms.