![]() ![]() To acknowledge the receipt of the credit memo, the buyer will issue a debit memo to the seller. When the buyer receives the seller’s credit memo, they are going to debit the Accounts payable to reflect in their financial records that they no longer have to owe the money for that merchandise they returned. The seller will also send the customer a credit memo (short for memorandum) to let the buyer know that they have credited their account. When the merchandise is returned, the seller will credit the buyer’s Accounts receivable. You have to maintain this balance not only within your debits and credits but also between yourself and your customer.įrom the seller’s perspective, when the customer calls the seller and wants to return defective merchandise inventory that was purchased. For the seller, if they have an Accounts receivable for $800, then there will be a buyer who also has an Accounts payable with the same amount of $800. Whether we provide goods or services, we have to look at the financial transaction from both sides of it. If the business using accounting software, a credit memo can be automatically created with the same line items as the original invoice. ![]() The memo might also include other details like a reference to the invoice number, purchase date, payment terms, and reason for issuing the credit.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |