Which document is issued by a lessor to the supplier and specifies that the lessor intends to purchase the equipment upon fulfillment of terms?

• A. Purchase Order
• B. Purchase Option
• C. Advance Funding
• D. Identification of Parties

Answer: (A)

In lease paperwork, the document that actually initiates procurement from the supplier and states the lessor’s intention to buy the equipment once the terms are met is the Purchase Order. It is issued by the lessor to the supplier, specifies the equipment, quantities, price, delivery details, and confirms that, upon fulfillment of the agreed terms, the lessor will proceed with the purchase. This makes the Purchase Order the binding instruction that moves the equipment from supplier to the lease arrangement.

A Purchase Option, by contrast, grants a future right to purchase at a set price, rather than a current commitment to procure upon term fulfillment. Advance Funding relates to how money is provided for the deal, not the act of ordering equipment. Identification of Parties simply lists who is involved. So the Purchase Order best fits the described role.