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While doing my revision for the upcoming june FA1 exam using a BPP exam kit i encountered this weird question.
Q:Which of the following correctly describes the term debit note?
A)It is issued by a supplier to a customer to demand payment in full for goods supplied.
B)It is issued by a customer to a supplier to request a credit note.
C)It is issued by a customer when goods are delivered.
D)It is issued by a customer to a supplier to cancel an invoice received.
The correct answer is B but how ? Debit note is always initiated by a supplier not a customer?How requesting a credit note is related to a debit note?If a debit note were issued by a supplier it would normally be called an invoice (or might be used to adjust an already issued invoice).
So, you are the customer and you receive goods accompanied by an invoice. You see that the invoice is for too much, therefore you raise a Debit note (in your books this is saying that you owe less to your supplier) and send that to the supplier. Assuming the supplier agrees with you claim, the supplier will issue a credit note to you – like a negative invoice form the supplier.
@Gromit said:
If a debit note were issued by a supplier it would normally be called an invoice (or might be used to adjust an already issued invoice).So, you are the customer and you receive goods accompanied by an invoice. You see that the invoice is for too much, therefore you raise a Debit note (in your books this is saying that you owe less to your supplier) and send that to the supplier. Assuming the supplier agrees with you claim, the supplier will issue a credit note to you – like a negative invoice form the supplier.
Thanks Sir! All clear but that was a bit tricky question:)
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