Debit note

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A debit note or debit memorandum (memo) is a commercial document issued by a buyer to a seller as a means of formally requesting a credit note.[1] Debit note acts as the Source document to the Purchase returns journal.[2] In other words it is an evidence for the occurrence of a reduction in expenses. The seller might also issue a debit note instead of an invoice in order to adjust upwards the amount of an invoice already issued (as if the invoice is recorded in wrong value). [3]

Debit notes are generally used in business-to-business transactions. Such transactions often involve an extension of credit, meaning that a vendor would send a shipment of goods to a company before the goods have been paid for. Although real goods are changing hands, until an actual invoice is issued, real money is not.[4] Rather, debits and credits are being logged in an accounting system to keep track of inventories shipped and payment.[5]

When a price is included on a debit note, it is the price which the customer was actually charged for those goods.

References[edit]

  1. ^ Staff, Investopedia (2011-06-07). "Debit Note". Investopedia. Retrieved 2017-09-15.
  2. ^ "How to Create a Debit Note in QuickBooks?". Retrieved 2021-05-02.
  3. ^ "What is a Debit Note?". Retrieved 2021-05-02.
  4. ^ "What You Need To Know About E-Invoices". Retrieved 2021-05-02.
  5. ^ "What is the Difference Between Debit Note and Credit Note?". Retrieved 2021-05-02.