A credit memorandum prepared by a customer results in the customer recording a debit to the vendor account.

Question

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A credit memorandum prepared by a customer would not result in the customer recording a debit to the vendor account. Instead, it typically indicates the customer is acknowledging a credit issued by the vendor, which would lead the customer to credit their Accounts Payable (or the specific vendor account) and debit an appropriate account (such as Inventory or a returns account), reflecting a reduction in what they owe the vendor.

A Credit Memorandum Prepared by a Customer Results in the Customer