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What is the difference between debit note and credit note? What is the treatment for debit note and credit note in accounting process?

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Question added by Siraj vannathamkandy , Senior Accountant , Gulf Business Center
Date Posted: 2013/08/13
steve khawaja
by steve khawaja , Director of Finance, MENA region , DAI Global

Your company can either issue a debit or a credit note to other compaies/entities.
This type of transactions is very popular in insurance companies by which they use this mechanism instead of invoicing clients (debit note) and granting credits to claims (credit note).
A debit note is a method of claiming costs paid by your company to suppliers or clients.
A credit note on the other hand is a way of reporting reversals or refunds you owe back to other parities.
Both debit and credit notes use rather expense accounts and inventories transferred that are either credits or debits depending on the type of transaction you are making and transferring to other copmanies.
This could be also used between a mother company and a subsidiary.

When the purchaser returns the goods to the seller the Purchaser sends a Debit Note to the seller (ie.
the purchaser debits the seller in his books ie.
Purchasers Books) and the Seller sends a Credit Note to the purchaser (ie.
the seller credits the Purchaser in his Books ie.
Sellers Books).
  Following are the entries : Sales account debit Receivable account credit (Being goods returned by the customer) ================= Creditor account debit purchases return credit (Being goods sent back to the seller) When the purchaser returns the goods to the seller the Purchaser sends a Debit Note to the seller (ie.
the purchaser debits the seller in his books ie.
Purchasers Books) and the Seller sends a Credit Note to the purchaser (ie.
the seller credits the Purchaser in his Books ie.
Sellers Books).
Following are the JVs to be passed:- Sales Return inward A/c Dr.
To Debtor A/c (Being goods returned by the customer) Creditor A/c Dr.
To Goods Return A/c (Being goods sent back to the seller) Read more at: http://www.caclubindia.com/forum/what-is-debit-note-and-credit-note--142660.asp#.UhIDqn_hd98

abidrahman pallatt
by abidrahman pallatt , Cashier cum Accountant , AL AMAAN TRVEL & TOURISM

    Debit Note is a document issued to a party stating that you are debiting their Account in your Books of Accounts for the stated reason or vise versa.
  It is commonly used in case of Purchase Returns.
ACC PAYABLE A/C    DR    TO PURCHASE RETURN Credit Note is a document issued to a party stating that you are crediting their Account in your Books of Accounts for the stated reason or vise versa.
 It is commonly used in case of Sales Returns. 
SALES RETURN A/C       DR.
         TO ACC RECEIVABLE

Ismail Halim Moustafa hassan
by Ismail Halim Moustafa hassan , مدير مالي و اداري , اماريتس هايتس للاستثمار و المقاولات - شركة مساهمة

Debit note is issued from customers to you, credit note is issued from you to supliers & cridetors

Nasir Hussain Kumbhar
by Nasir Hussain Kumbhar , Sr.Accounting and operation manager , JUBAILI AGROTEC LTD

debit note is issued by other company on our company and credit note is issued by our company on other company which has purchased from our company.

Ahmed Megahed
by Ahmed Megahed , M&A and Due Diligence Consultant , Integrated alpha

Definition of 'Debit Note' A document used by a purchaser to inform a vendor of the quantity and dollar amount of goods being returned, and requesting that the dollar amount be returned to the purchaser.
A debit note is often used to return goods on credit.
The vendor then issues a credit note to the purchaser indicating that the goods have been received, and that the purchaser will not have to pay for them. 
http://www.investopedia.com/terms/d/debit-note.asp Credit note A credit note is issued to correct a genuine mistake or to give a credit to your customer under the following situations: correction of a genuine mistake (e.g.
goods invoiced as standard-rated which should have been exempt or zero-rated) supply did not take place charges are partly or fully waived before/after delivery of the goods goods or services are accepted, but terms of the contract are not fully met (e.g.
sub-standard goods are accepted by the customer at a reduced price) goods are returned or services are not accepted goods and services are supplied for an unconfirmed consideration http://www.iras.gov.sg/irashome/page04.aspx?id=10728

khaled Ibrahim Sayed Abd El Salam Ibrahim
by khaled Ibrahim Sayed Abd El Salam Ibrahim , Chief Accountant , -ElMehy engineering company

There are a lots of use for both , BUT the well known use in most of company when you just mention debit THAT lead you to Accounts receivable BUT when you mention Credit THAT lead you to Accounts Payable , Also you must take in your thinking that they are a lots of use them in others sections like Bank / Gl / Supply chian / Inventory ...according of the need to these transaction, And for the accounting procdures for DEBIT in receivable , you will reverse the nature of AR to be credit instead of debit and the other accounts it depends according to aim for your debit But CREDIT in payable , you will reverse the nature of AP to be Debit instead of credit and the other accounts it depends according to aim for your credit.

Sudipta Kumar Sarkar
by Sudipta Kumar Sarkar , Accounts Executive , Tax & Law

Credit note is issued by supplier in respect of Purchaser account has been credited in books, whereas debit note is a note issued by purchaser to supplier in respect of supplier account has been debited in books. 

Debit note is issued from second party to you, credit note is issued from you to second party

ASOKAN KUMARASAMY
by ASOKAN KUMARASAMY , Manager Accounts , RaamBaag Equipment & Services (P) Ltd.,

Accounting procedures to accurately record the business finances transaction process is bookkeeping.
By adopting some simple and easy accounting procedures.
Your company can minimize financial losses and operate at a profit.

Rachana L
by Rachana L , Financial Assistant , Hewlett Packard

Debit note is raised by the customers & we have to pay it for the services received  credit note is raised by us to receive the payment for the services rendered  

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