If merchandise sold on account is returned to the seller, the seller may inform the customer of the details by issuing a:

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A credit memorandum is typically issued when merchandise sold on account is returned to the seller. It serves as a formal record of the return and provides details such as the date of the return, the reason for the return, and the amount credited to the customer's account. A sales invoice is issued when the merchandise is originally sold, a purchase invoice is issued when the seller purchases merchandise from a supplier, and a debit memorandum is issued to inform the customer of a debit made to their account (such as for a payment or returned check).

If Merchandise Sold on Account Is Returned to the Seller