To document approval of purchase returns, management issues a credit memorandum meaning that accounts payable are reduced for the amount of the return.

Name: To document approval of purchase returns, management issues a credit memorandum meaning that accounts payable are reduced for the amount of the return.
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Question

Quizplus · Accepted Answer

A credit memorandum issued by management for purchase returns reduces accounts receivable, not accounts payable, as it indicates that the buyer's obligation to pay is reduced.

To Document Approval of Purchase Returns, Management Issues a Credit