Editing Credit note (section)

{{Short description|Commercial document used by sellers and buyers}}
{{More citations needed|date=November 2024}}{{Accounting}}
A '''[[Credit (accounting)|credit]] note''' or '''credit memo''' is a commercial document, utilized in business transactions to indicate a reduction in the amount owed by a customer or owed to a supplier. If the customer returns goods to the seller, the [[invoice]] previously issued is cancelled, in part or as a whole, with a credit note.<ref>{{Cite book |title=A Dictionary of Accounting |date=2016 |publisher=[[Oxford University Press]] |isbn=9780198743514 |editor-last=Law |editor-first=Jonathan |edition=5th |chapter=credit note |doi=10.1093/acref/9780198743514.001.0001}}</ref>

Credit notes act as a [[source document]] for the sales return journal. In other words, the credit note is evidence of the reduction in sales. A credit memo, a contraction of the term "credit memorandum", is evidence of a reduction in the amount a [[buyer]] owes a [[seller]] under an earlier invoice.

It can also be a document from a [[bank]] to a [[depositor]] to indicate the depositor's balance is being in the event other than a deposit, such as the collection by the bank of the depositor's note receivable.