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Definition and types of credit note

Answer Text:
Credit note:
-Is a document issued by a seller to the buyer to correct over charge errors in an invoice.
Types of credit note:
a) Issued credit note- is also referred to as outgoing credit note. Refers to credit note issued by the seller to the buyers to
reduce the amount of debt due from them(customers). It is used as a source of document for recording information in sales returns journal.
b) Received credit note- also referred to as incoming credit note.
-refers to credit note received by buyer from suppliers and reduces the amount of debt due to suppliers.
-used as a source document for recording information in purchases return journal.