Credit memo & debit memo?

[duppy]

hi

can you please tell me what is the difference between credit memo & debit memo if possible with an illustration.


thanks in advance.[:)]

[admin]

http://erpstuff.com/topic.asp?TOPIC_ID=1716
http://erpstuff.com/topic.asp?TOPIC_ID=2225
http://erpstuff.com/topic.asp?TOPIC_ID=1841

[byswamy]

Hi Duppy

In Payables

Debit memo will be rised by us, credit memo will be rised by the supplier. Both memos increases the Laibility of the Suppliers.
we will rise dedit memo when u return the good to supplier.
credit memo will be rised by supplier for any damaging goods, discounts etc.

In Receivables

Credit memo- will be rised when ruturned goods from the customer. it derceases the Receivable A/C of the customer
Debit memo- it increses recevable A/C of the customer(Any additional charges)

If u want to more clarification mail me....


Regards
swamy

[vvrsankar]

Many people are getting this doubt. The simple way of understanding...

Here there are two parties in Debit/Credit Memo.For convinience letus say one party is Maker and the Second Party is Reciepent.


1. Maker- Party which prepares or makes or raises Debit / Credit memo
2.Reciepent - Party which recieves Debit/Credit Memo from the Maker

<b>In case of Debit Memo</b> -- The Reciepent's account gets debited in the books of Maker ( obviously Maker's account gets credited in the books of Reciepent)

<b>In case of Credit Memo</b> -- The Reciepent's account gets credited in the books of Maker ( obviously Maker's account gets debited in the books of Reciepent)

Briefly - Reciepent's account gets Debited ( Debit Memo) , Credited ( Credit Memo) in the books of Maker

Ravi Sankar

[puppala]

Credit Memo & Debt Memo both are used to reduce the supplier liability. Cr. Memo is raised by the Supplier and Dr. Memo is raised by Actual Business concern. You can adjust both against a Invoice in payment workbench

[vvrsankar]

for more clarity I am giving answer fully once again

Many people are getting this doubt. The simple way of understanding...

Here there are two parties in Debit/Credit Memo. For convenience let us say one party is Maker and the Second Party is Recipient.


1. Maker- Party which prepares or makes or raises Debit / Credit memo
2.Reciepent - Party which receives Debit/Credit Memo from the Maker

In case of Debit Memo -- The Recipient?s account gets debited in the books of Maker ( obviously Maker's account gets credited in the books of Recipient)

In case of Credit Memo -- The Recipient?s account gets credited in the books of Maker ( obviously Maker's account gets debited in the books of Recipient)

Briefly - Recipient?s account gets Debited ( Debit Memo) , Credited ( Credit Memo) in the books of Maker

But if we think with some logic? in case of purchases? , the buyer raises debit memo to decrease his (buyer) liability to pay , because the memo benefits buyer and he will be in the anxiety to get the benefit of it . Simply, we can say , if this is not raised the looser is buyer , that is why buyer acts quickly. Of course some times even seller may also raise Credit memo. In case of sales vise versa.

But in AP module of oracle ?
1.The normal context is , in case of vendors , your organization is liable to pay to vendor
2.But Debit/credit memo (invoice type) purpose is reversing the normal context . That is decreasing the liability to pay to vendor. In brief we can say Debit/Credit Memo (invoice type) in AP module decrease the liability to pay to vendor. Both Debit/Credit Memo (invoice type)serve the same purpose .


From all above , one thing that should be understood is.. Invoice Type in AP module for entering data is different from the document or paper sent to the second party recipient.

The sentence ?Both Debit/Credit Memo (invoice type)serve the same purpose ? is valid only for Invoice Type in AP module for entering data.

Suppose if your company wants to decrease the liability to pay to the vendor , then the name of the document / paper prepared and sent to the vendor is ?DEBIT MEMO?. But while recording this transaction in AP module you can select invoice type either ?DEBIT MEMO? or ?CREDIT MEMO?.


Ravi Sankar