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Former Member
Mar 11, 2010 at 08:54 AM

Confused on 'Credit memo''Debit memo''Credit/Debit'....


Hi Experts,

I found i am confused on Credit memo/Debit memo or Credit/Debit in SD. And read few articles and found more confused...

I read below 2 articles regarding the 'Credit' and 'Debit', seems what they said are not match each other....this confused me...

Article A:

"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."

Article B:

"Suppose a simple sales transaction like an invoice is being made, then the system needs to identify the revenue account it should credit and the cash or customer account it should debit."

My understanding from Article A is:

For Return damaged goods:

Credit memo reduces Amounts Receivable from Customer.

Debit memo reduces Amounts Payable to a Vendor.

My understanding from Article B is:

After the goods is sold to customers:

Normally the invoice is raised to the customer, then revenue account(Our company side?) should credit(means reduces?? if according to Article A)

what i thinking is that after the goods sold to customers, our revenue account should be increased, right, why here use 'Credit'????

Hope kindly help me, thank you very much!