Question

Which of the following is not treated as an internal evidence of audit for returns of goods?

• A. Copies of sales challan.
• B. Goods received note.
• C. Copies of cash memo.
• D. Debit notes.

Answer 1

The correct option is D Debit notes.

A debit note is a commercial document issued by a buyer to seller as a means of requesting to issue a credit note. Debit note act as a source document for purchase returns. All others mentioned like sales challan, goods received note and cash memos, all are internal documents.

Where the internal evidence is not readily available, auditor should have these debit note as evidence of audit.