Which Document Indicates a Reduction in the Amount Owed to a Vendor

question 29

Multiple Choice

Which document indicates a reduction in the amount owed to a vendor because of returned goods?

• A) debit note
• B) credit note
• C) shipping room report
• D) receiving room report

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Definitions:

Accounting Equation

A fundamental financial equation representing the relationship between assets, liabilities, and equity (Assets = Liabilities + Equity).

Allowance Method

A method of accounting for bad debts that involves estimating uncollectible accounts at the end of each period.

Reinstated Account

Refers to an account that has been reactivated after being suspended or closed, typically after addressing issues that led to its suspension or fulfilling necessary requirements.

Accounting Equation

The foundational principle in accounting that states assets equal liabilities plus equity.