Some of the goods that were previously sold to a customer on account were returned to the seller, and the seller used a form to show the amount and terms of the return. The source document for the journal entry for this return is called a

Question

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A credit memorandum is a source document used for recording returns of goods to a seller or reduction in the amount owed by a buyer. Therefore, it is the best choice for the scenario described in the question.

Some of the Goods That Were Previously Sold to a Customer