Question

Write Short notes on the following:
Importance of Credit Memo:

Answer 1

The importance of Credit Memo is explained as follows:
(1) Credit memo gives acknowledgment of amount due from the buyer to the seller.
(2) On the basis of Credit Memo, credit sales are recorded in the sales book by the seller.
(3) On the basis of Credit Memo, credit purchases are recorded in the purchase book by the buyer.
(4) Credit memo gives proof for verification of credit sales of the business organisation.