Ad Free CAclubindia and Daily Updates on your Mobile. Subscribe Now!

Debit note

CA Mohd Gouse (Chartered Accountant) (497 Points)

26 December 2007

dear freinds,

i m asking a silly qustion to you.. plzz answer.

if we issue Debit note to the creditors do they have to issue credit note to us for the same.

what i mean is that do we have to issuse credit note for debit note issued by the customer& vice versa???

or just if customer send us Debit note then we only have record it in our books & nothing else..

thank you.

Reply
Follow
Share

15 Replies

Miss Komal Mantri (Chartered Accountant ) (1974 Points)
Replied 26 December 2007

no ...credit note is issued to customer in case of sales return... u have to just record it...

Upgrade to CAclubindia Pro. Subscribe Now!

(Guest)

no you dont have to issue any credit note but you have to record the same in your books

Rugs (56 Points)
Replied 27 December 2007

but can anyone clarify as to when then credit note is to be issued

CA. Amit Daga (Finance Controller CA. CS. CFA. CIFRS. M.COM. ) (9017 Points)
Replied 27 December 2007

A credit note is a monetary instrument issued by a seller that allows a buyer to purchase an item or service from that seller on a future date. Credit notes may be issued by a seller as a goodwill gesture to a buyer who wishes to return previously purchased merchandise (instead of cash repayment) in circumstances where the original sales agreement did not include an explicit refund policy for returned items. In such circumstances, a credit note of value equal to the price of the returned item is usually issued allowing the buyer to exchange his purchase for other items available with the sale. A credit note is a monetary instrument issued by the business that allows a buyer to purchase goods or services from the business on a future date. It is used by the customer who wishes to return previously purchased merchandise and to purchase some goods or services on a future date. A Credit Note or Credit Memo is a document used to adjust or rectify errors made in a sales invoice which has already been processed and sent to a customer. If you have already sent an invoice to a customer but now need to provide a credit for that invoice, you would send them a Credit Note or Credit Memo. You can think of a credit note as a "negative invoice."

CA. Amit Daga (Finance Controller CA. CS. CFA. CIFRS. M.COM. ) (9017 Points)
Replied 27 December 2007

Rugs i bel this article will help you

Upgrade to CAclubindia Pro. Subscribe Now!

Ramkrishna Mokashi (Chartered Accountant) (734 Points)
Replied 29 December 2007

No, there's no need to issue credit notes against debit notes or vice versa.. However, it will be a good practice to get debit notes (even credit notes in some cases) issued to parties acknowledged by them, so as to avoid future complications.

(Guest)

hi mohd gouse for example ,, u run a leather goods co. and u purchased leather of Rs 50000 from AP leathers for the purpose of job work. Now u find that leather of worth Rs 5000 is of inferior quality then in this case u will issue a debit note to the supplier i.e., AP leathers , .U will issue a debit note of Rs 5000 to the AP leathers and u will send the inferior quality leather with the debit note. In this way ur payment will be debited by 5000 and u have to pay only 45000. And some times suppliers issue a credit note when u return back their default goods to them.In that case they credit ur account by the amount mentioned in the credit note.

CA. Dashrath Maheshwari (TaXpert) (15103 Points)
Replied 16 February 2008

I WANT TO ASK YOU ALL THAT WHAT YOU MEAN BY ISSUE... Is recording a transaction in our books of accounts is not "issue" as Mr. Gouse asked. Issue is not printing a transaction and sending through post, it is just recording a transaction. If some one is debited us in his books and if we vouch this transaction genuine then we have to pass a credit journal in our books. The other name of credit journal is credit note... "Go deep in concept which will make freelance feelings ; not in accounts which will cause for tension only"

CA. Dashrath Maheshwari (TaXpert) (15103 Points)
Replied 16 February 2008

CA. GOPAL SONIKA (CHARTERED ACCOUNTANT) (1426 Points)
Replied 17 February 2008

If Debit note is issued to creditors, it is not necessary that credit note has to be received by them subject to that the same has been approved by the creditors. Similar case is with Debtors.

Upgrade to CAclubindia Pro. Subscribe Now!

(Guest)

What you mean by Credit and Debit Note ? Pls. give example also to understand.

Thanks n regards

Girish

Rahul Seksaria (C.A (Final) & C.S (Inter)) (54 Points)
Replied 29 April 2008

i always thought that when i intent to make a person my debtor or creditor for some dispensaries or charges which are in nature of reimbursement. Eg. electricity for use of premises are booked through such notes.

In such cases party cant raise bills and so they issue notes

whats your take?

Azmathullah Khan (Accounts Manager) (1386 Points)
Replied 22 May 2008

UR question not silly, Any how no need to issue the credit note, but the receiver have to raised credit note if they get debit note. Silly answer.

Sanjay Sharma (10 Points)
Replied 29 August 2008

How can we use credit note for Service Tax Transaction? Legal document for Service tax transaction is Service Tax Invoice which shall have all relevant information required by law which might be missing on credit note.