Uses of Credit Notes in Accounting

Hello friend... I hope you are doing well. Today I am going to vow you about the uses of a credit notes in accounting. These are a type of source documents in accounting. I hope it will shed more light on the same. This document is veteran to nick overcharge. An overcharge is where the invoice had been overstated either by the creditor or the seller. There are different types of credit notes. These include;



I. Outgoing credit note; this is faded to slash credit sale made to the creditors. It is issued when goods sold on credit to the debtors are returned by them. This implies that the amount owed by the debtors to the organization is reduced. Outgoing credit notes are recorded on sales returned inward book.



II. Incoming credit note; This is issued by the creditors to the business. When you prefer goods on credit from the suppliers then some of the goods are returned by you to the supplier, then the amount that you are supposed to pay the supplier is reduced. This is done by the supplier on thunder of a credit impress. Lastly, all the incoming credit label is recorded on the purchases return day book.



I hope that information was of consume to you, whether you want to begin your believe business online or offline, you need these type of books. They are very vital in your accounting ventures. These are the standard tools that every business needs to survive. Have a nice day!