Which document is essential for verifying transactions in the accounts payable cycle?

A purchase order is essential for verifying transactions in the accounts payable cycle as it serves as an official agreement between the buyer and the seller regarding the purchase of goods or services. It outlines the specifics of what has been ordered, including quantities, pricing, and delivery dates. When an invoice is received from a vendor, the accounts payable department can cross-reference it with the original purchase order to ensure that the details match. This process helps prevent errors, discrepancies, and instances of fraud by confirming that the company is only paying for goods or services that were actually ordered and agreed upon.

In contrast, a bank statement primarily provides details about the company's bank transactions, which are useful for reconciliations but do not directly verify specific purchases. A sales invoice, while important, is generated by the seller and does not initiate or confirm the purchasing process from the buyer's perspective. Instead, it needs to be matched against the purchase order to ensure accuracy. A vendor application is more related to the onboarding of suppliers and does not play a direct role in the transaction verification process itself. Thus, the purchase order stands out as the document that plays a crucial role in the verification of transactions within the accounts payable cycle.