What is an invoice in purchasing terms?

An invoice is a vendor’s itemized statement of merchandise shipped, which serves as a detailed document reflecting the transaction between the buyer and the seller. It typically includes crucial information such as quantities of items purchased, descriptions, prices, and payment terms. This document plays a significant role in the purchasing process as it enables buyers to confirm that they have received the correct items at the agreed-upon price, ultimately facilitating smooth financial reconciliation and inventory management.

Other options, while relevant in a broader financial context, do not accurately capture the unique role of an invoice. A statement of account balance refers to the overall balance due on an account, rather than specific transactions. A summary of overall sales provides aggregate data on sales performance but lacks the detailed breakdown found in an invoice. A receipt for a return documents the return of products but is not the same as an invoice, which records the initial sale. Thus, the definition provided in the correct answer is essential for understanding procurement and accounting processes in a business context.