A debit memorandum is:
A) Required whenever a journal entry is recorded.
B) The source document for the purchase of merchandise inventory.
C) Required when a purchase discount is granted.
D) The document a buyer issues to inform the seller of a debit made to the seller's account in the buyer's records.
E) Not necessary in a perpetual inventory system.

Question

Quizplus · Accepted Answer

A debit memorandum is a document issued by a buyer to inform the seller of a debit made to the seller's account in the buyer's records. It is used to request an adjustment to the seller's account due to a billing error, return of goods, or other reasons. It is not required whenever a journal entry is recorded, nor is it the source document for the purchase of merchandise inventory. It may be required when a purchase discount is granted, but this is not always the case. In a perpetual inventory system, debit memos may still be necessary to record adjustments to inventory accounts.

A Debit Memorandum Is