Credit note
A credit note documents a reduction of an amount previously invoiced. A seller commonly issues it for returned goods, overcharging or an agreed price reduction. The seller reduces the customer’s balance and the relevant revenue amount; the buyer reduces the supplier balance and the relevant purchase or asset cost. Tax adjustments follow the question’s sales tax assumptions.
Worked example
A seller issues a $100 credit note for goods returned: the customer no longer owes that $100.
Common mistake
A credit note is a document, not a bank credit: it does not necessarily involve a cash refund at that moment.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | F1 | Direct | July 2027–August 2028 |
| ACCA | F2 | Supporting | July 2027–August 2028 |
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | K1 | Direct | July 2027–August 2028 |
| CIMA | BA3 | Direct | Official assessment-window verification pending |
| FIA | FFA | Direct | September 2026–June 2027 |