Credit memo and Debit memo in Oracle
What is Credit memo and debit memo in oracle Accounts payable
First of all We will see what is credit memo in oracle and debit memo in oracle payables.
Credit memo and debit memo in oracle both are used to reduce buyer liability
in Payable . Therefore both are negative in amount .
Credit memo in oracle payables is generate by supplier . It will be in negative amount .
Debit memo in oracle payables is generated by buyer it will also be in negative amount.
Consider the following example
Suppose we have purchased 5 items from a supplier of 100$
.Now 3 items we received are in damaged state. Now if supplier sends you document which will show that some
amount will be reduced form original amount as you don’t want damaged products
,that will be credit memo .It will be in negative amount and will be recorded as credit memo in oracle.
If instead of supplier, we are sending a document containing
the detail of damaged goods then that will be debit memo in oracle.
In both the case our(buyer) liability will reduce.
What is Credit memo and debit memo in Oracle Account Receivables
First of all We will see what is credit memo in oracle and debit memo in oracle receivables.
What is credit memo:
The functionality of credit memo will be same here in
receivables same as payable. No difference it will in negative amount and will
reduce the buyer liability but debit memo will function in opposite way.
What is debit memo:
Debit memo in receivables will increase the liability . It will
be in positive amount .
Consider the following example
Suppose we have sold some 5 items of 100$ to some buyer. By mistake we have sent an invoice for 4 items only. Now we want the customer to pay for 5th item also. In that case we will send an Invoice
which will be called as debit memo to buyer. It will be in Positive amount and will be recorded as debit memo in oracle.
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