CSEET · Business Communication · Common Business Terminologies
Mehta Traders sends a customer a document reducing the amount the customer owes because some goods supplied were returned as damaged. Which document is this?
It is a credit note. The seller issues it to reduce the buyer's liability when goods are returned or an invoice was overstated. A debit note does the opposite by increasing the amount due, so it does not fit this situation.
- ADebit note
- BCredit noteCorrect
- CProforma invoice
- DDelivery challan
Explanation
A seller issues a credit note to reduce the amount receivable from the buyer, for example on goods returned or overcharges. A debit note is raised to increase the amount owed, such as for undercharges. A proforma invoice precedes a sale and a delivery challan accompanies goods.
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