Credit memos are normally issued to:
A)adjust the customers balance to the amount owed to the company because of returned goods or an allowance.
B)assist in the aging of accounts receivable.
C)reduce customer frustration and sales losses.
D)inform the customer of the balance due.

Question

Quizplus · Accepted Answer

Credit memos are issued to adjust the customer's balance due to returned goods or allowances. They are used to reduce the amount owed by the customer and reflect the corrected balance. Option B refers to aging of accounts receivable and not credit memos. Option C is not a direct purpose of credit memos but rather a potential indirect benefit. Option D is incorrect as credit memos are issued to inform the customer of a reduction in the balance due, not the balance due itself.

Credit Memos Are Normally Issued To