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Former Member
Dec 02, 2009 at 11:36 AM

Entry for Credit accounting

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Dear All,

I need help in understanding accounting entry for a credit memo. There is a scenario in which due to some defects the product is returned and therefore a credit memo is created.

In the system the accounting entry is a s below:

Debit revenue with 5000 ➕

Credit Customer with 5000 ➖

Please explain why there is an increase in revenue and Customer's account is posted with negative amount? As per my understanding, a credit note to a customer means that my revenue should go down and customer should receive the amount. It may be possible that I'm mis-comprehending the entry hence please help me out.

Warm Regards

Mazdul