Credit notes are official documents prepared by the supplier to be given to the purchaser.
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Acknowledgment of Return of Goods
In return for a Debit Note, suppliers issue a Credit Note to accept the goods returned formally and to record the amount accountable for these goods.
In the seller’s Journal Entries, this Sales Return will be recorded.
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Correcting Overstated Invoice
Suppliers may also issue a Credit Note within 30 days to rectify previous invoices that had overstated the amount that the purchasers have to pay.
What happens after issuing a Credit Note?
Upon receiving or issuing a credit note, you can check your Aged Payables Summary or Aged Receivables Summary to view the amounts you owe and are owed to you.