Credit Note

A credit note cancels a whole or part of an invoice, either because the invoice itself was incorrect or there was a problem with the goods/services that were being invoiced for.

Credit notes are frequently printed in red to distinguish them from normal invoices.

They normally contain similar information to that contained on the original invoice, plus the invoice number to which it relates.


2 responses to “Credit Note

  1. So, if we want to record a refund for goods returned by customers… Double entry is e.g.?

    Dr Credit Note
    Cr Receivables

    to cancel, and then ?

    Dr Receivables
    Cr Sales

  2. Double entry would effectively be the reverse of the sale entry.
    If it was a credit sale:
    Cr Debtors Account (for the appropriate customer)
    Dr Sales Account