Credit note

A credit note or credit memo is a commercial document issued by a seller to a buyer. Credit notes act as a Source document for the Sales return journal. In other words the credit note is evidence of the reduction in sales. A credit memo, a contraction of the term 'credit memorandum', is evidence of a reduction in the amount that a buyer owes a seller under the terms of an earlier invoice. A credit note or credit memo is a commercial document issued by a seller to a buyer. Credit notes act as a Source document for the Sales return journal. In other words the credit note is evidence of the reduction in sales. A credit memo, a contraction of the term 'credit memorandum', is evidence of a reduction in the amount that a buyer owes a seller under the terms of an earlier invoice. It can also be a document from a bank to a depositor to indicate the depositor's balance is being in event other than a deposit, such as the collection by the bank of the depositor's note receivable. A credit note lists the products, quantities and agreed prices for products or services the seller provided the buyer, but the buyer returned or did not receive. It may be issued in the case of damaged goods, errors or allowances. In respect of the previously issued invoice, a Credit Memo will reduce or eliminate the amount the buyer has to pay. Note: A Credit Memo is not to be substituted as a formal document. The Credit Memo rarely contains: PO #, Date, Billing Address, Shipping Address, Terms of Payment, List of products with quantities and prices. Usually it references the original Invoice and sometimes states the reason for issue.