What is meant by a credit memo?

Answers were Sorted based on User's Feedback



What is meant by a credit memo?..

Answer / vijay inamdar

credit memo is as similar as money back to your account.
For Ex. If you did excess payments ( the difference between
PO price and Account Transfer price) to the vendor than the
actual payment or under some circumstances vendor is
returning some amount to your account, for this you need to
maintain one account type, that account type is called
credit memo.this may be just to identify why and from where
the money has been posted in your account.
If this is not maintaind, at the valuation level
conflicts in payment differences may arise.
If not please correct me.

Is This Answer Correct ?    17 Yes 6 No

What is meant by a credit memo?..

Answer / c.madhava reddy

Credit memos are reversals of invoice when the vendor has
charged you for more quantity that he has sent.
Say vendor sent you 8 units of a good costing 10 rs each and
charged you for 10 units in the invoice , so we will enter
the original amount (rs 100) and then do a credit memo for 2
units * rs 10 = rs 20
so when he sends you the invoice the accounting entry will be
Gr/IR dr. 100
Vendor account cr 100
During credit memo it will be :
Vendor account dr 20
GR/IR account cr 20
In effect the vendor account has been debited by rs 20
because he charged you more during invoice.

Is This Answer Correct ?    11 Yes 0 No

What is meant by a credit memo?..

Answer / n raja

Credit Memo is a document that is issued by the vendor for
the damaged goods returned to the vendor by us. this amount
will be adjusted in the future purchases. for accounting
entries we will receive this credit memo.

Is This Answer Correct ?    6 Yes 2 No

What is meant by a credit memo?..

Answer / hawani reddy

Credit memo always refers to vendor posting.Credit memo will lead to debit posting to vendor account.
for example:
while doing Invoice verification we have given qty as 100
but later we have realized that it should be 90qty.For this difference amount we will do Credit memo in MIRO.

Is This Answer Correct ?    1 Yes 2 No

What is meant by a credit memo?..

Answer / prem kumar

Credit Memo - A transaction that reduces Amounts Receivable
from a customer is a credit memo. For eg. The customer
could return damaged goods. A debit memo is a transaction
that reduces Amounts Payable to a vendor because, you send
damaged goods back to your vendor.

Is This Answer Correct ?    0 Yes 3 No

What is meant by a credit memo?..

Answer / sathya

Usally the company is ranking the vendor with some
constraints.If the vendor is having a "A" class
ranking,then the company is making the payment well
inadvance or credit memo in favour of the vendorbefore the
goods is delivered.

Is This Answer Correct ?    1 Yes 21 No

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