Credit memos are normally issued for what purpose(s)?
A) To adjust the customers balance to the amount owed to the company.
B) To assist in the aging of accounts receivable.
C) To reduce customer frustration and sales losses.
D) To inform the customer of the balance due.

Question

Quizplus · Accepted Answer

Credit memos are usually issued to adjust the customer's balance to the amount owed to the company. This may be due to a pricing error, returned merchandise, or other reasons where the customer has been overcharged. It helps to ensure that the customer is only charged for what they owe, and it keeps the company's accounting records accurate.

Answer: C
 While credit memos can serve multiple purposes, one of their main benefits is reducing customer frustration and potential sales losses. If a customer has an incorrect charge on their account, they may become frustrated with the company and choose to take their business elsewhere. By issuing a credit memo to correct the error, the customer is more likely to continue doing business with the company.

Credit Memos Are Normally Issued for What Purpose(s)