MANAGEMENT

Detailed explanation-1: -Explanation. A debit memorandum is a document also called debit memo invoice, that is used to inform a buyer about the seller being debiting where there is increasing amount in the account receivables, therefore there is increasing in the amount of buyer’s accounts payable as a result of extenuating circumstances.

Detailed explanation-2: -The purchaser uses the debit memorandum to inform the seller about the return and to prepare a journal entry that decreases (debits) accounts payable and increases (credits) an account named purchases returns and allowances, which is a contra‐expense account.

Detailed explanation-3: -(a) A seller of merchandise issues a credit memo to indicate the amount of money that has to be paid by the buyer for purchasing goods after deducting the sales return or allowance. The buyer’s account is credited for accounts receivable, and the sales account is debited.

Detailed explanation-4: -Credit memos reduce invoice and account balances. By applying one or more credit memos to invoices with positive balances, you can reduce the invoice balances in the same way that applying a payment to an invoice. Debit memos increase the amount a customer owes. It is a separate document from the invoice.

Detailed explanation-5: -Debit memos, also called debit notes, are corrections to invoices. If you accidentally submit an invoice that’s too low, you can send a debit memo to correct it and increase the invoice after it’s sent. The customer can then use the memo to adjust their books, as well.