A note sent by buyer on return of goods is :a)Debit Noteb)Credit Notec...
Buyer of goods is customer from the point of view of business. In his books our account balance would show a credit balance. When he returns the goods to us, he debits our account and to show this fact he sends a debit note to us indicating the above fact.
A note sent by buyer on return of goods is :a)Debit Noteb)Credit Notec...
Debit Note
A debit note is a document that is sent by a buyer to a seller to inform them of a return of goods. It is used to request a refund or adjustment on the buyer's account due to a return or cancellation of goods purchased.
Explanation:
When a buyer wishes to return goods to a seller, they typically send a debit note to notify the seller of the return and request the necessary adjustments. The debit note serves as a formal communication between the buyer and the seller regarding the return of goods and the resulting financial implications.
Key Points:
1. Notification of return: The buyer uses the debit note to inform the seller about the return of goods. This helps the seller to process the return and take necessary actions.
2. Request for adjustment: The buyer includes details of the returned goods and requests adjustments to their account, such as a refund or a credit against future purchases.
3. Supporting documentation: The buyer may attach relevant documents, such as the original invoice, shipping documents, or proof of return, to support their claim for a refund or adjustment.
4. Financial implications: The debit note helps the seller to update their records and make the necessary adjustments to the buyer's account. This may involve refunding the amount paid by the buyer or issuing a credit note for future purchases.
5. Record-keeping: Both the buyer and the seller maintain a copy of the debit note for their records. It serves as evidence of the return of goods and the subsequent financial transactions.
6. Accounting treatment: In the seller's books, the debit note is treated as a reduction in sales revenue and accounts receivable. In the buyer's books, it is recorded as a decrease in accounts payable or an increase in cash, depending on the nature of the adjustment.
Overall, a debit note is an important document in the return process as it facilitates communication between the buyer and the seller and ensures that the necessary adjustments are made to the financial records.