What is the role of a Purchase Order?

A Purchase Order (PO) serves as a formal document issued by a buyer to a vendor, indicating the buyer's commitment to purchase specified goods or services at agreed prices. The primary purpose of a PO is to outline the details of a transaction, including the items requested, quantities, prices, delivery dates, and other terms and conditions of the purchase. This commitment helps to ensure that both parties are aligned on what is being bought and under what terms, creating a clear agreement that can be referred to throughout the transaction process.

This structured approach not only facilitates better communication and understanding between the buyer and the vendor but also enhances inventory management, financial tracking, and order accuracy. Therefore, choice C accurately captures the essence of a Purchase Order by emphasizing its role in expressing a commitment to receive and pay for goods and services.