ACCA Applied Knowledge · Financial Accounting · Sales and purchases
A customer returns goods that were sold on credit because they were faulty. Which document does the seller issue to reduce the customer's account balance?
The seller issues a credit note. It reduces the amount the customer owes after faulty goods are returned. A debit note is the buyer's request for credit, a goods received note records delivery, and a statement merely summarises the account balance.
- ACredit noteCorrect
- BDebit note
- CGoods received note
- DStatement of account
Explanation
A seller issues a credit note to reduce the amount owed by the customer when goods are returned. A debit note is raised by the buyer to request a credit, so it is not the seller's document here. A goods received note records receipt of goods, and a statement only summarises balances.
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