what are credit note and debit note. And how to adjust these entries in books of account. i mean shall we deduct or add credit note to sales and similaraly for debit note to the purchases.
3 Replies
Abhijeet Deshpande
(Co-Founder & Manager @ Tax-Yantra)
(1171 Points)
Replied 17 September 2014
Credit Note: It is a note (not invoice) raised by seller against the purchaser.
It will be raised in following cases (examples):
1. where the Sales shown by the company is excess than what should have been shown;
2. Sales return;
3. After sales discounts, etc.
The amount of Credit note ensure reduction of Sales (Sales amount) in first two cases and in 3rd case it shown in discount (like cash discount for early receipts, etc.). This can be verified by checking whether the credit note raised is knocked off against the specific invoices.
CA Saloni
(Manager-Accounts & GST Consultant)
(5124 Points)
Replied 17 September 2014
Yes abhijeet is right,
Credit/ debit note is different from invoices..........
A credit note for company is debit note for the other company.......
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