Credit Memos Are Normally Issued for What Purpose(s)

question 37

Multiple Choice

Credit memos are normally issued for what purpose(s) ?

• A) To adjust the customers balance to the amount owed to the company.
• B) To assist in the aging of accounts receivable.
• C) To reduce customer frustration and sales losses.
• D) To inform the customer of the balance due.

---

Definitions:

Break-even Point

The sales level at which a business generates neither profit nor loss, covering all fixed and variable costs.

Unit Sales

The quantity of products sold, not considering the price at which they were sold.

Contribution Margin

Contribution Margin is the amount of revenue remaining after deducting variable costs, which can then be used to cover fixed costs or generate profit.

Income Statement

A financial statement that shows a company's revenues and expenses over a specified period, culminating in the net income or loss.