Sales and purchases

A credit note is issued by a seller (supplier) to a buyer (customer) to reduce the amount owed by cancelling a sales invoice (wholly or partially).

The buyer may send the seller a debit note (e.g. with the return of faulty goods) as a request for a credit note.

A debit note MAY be recorded in a purchases returns day book – however, as this is internally-generated, an auditor would expect to see debit notes matched with credit notes (received from the supplier) to confirm that the supplier accepts the reduction in amount owing. So a business may not record debit notes in the books but instead record only credit notes.

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