Note – Please take our quiz ‘Quiz 19 – Credit Note – (Answers)‘ on this page before going through the below answers. Only the top 3% of our audience scored 10/10 in all of them.
- Name – Quiz 19 – Credit Note – (Answers)
- Topic – Credit Note
- Answers with Explanation
Q1. _____ is sent by a seller to the buyer in case of goods are returned.
Ans. When goods are returned the seller sends a credit note to the buyer confirming that a credit has been provided to them for the eligible amount. (Think of it as a refund which may be adjusted with future purchases but received in form of money)
Q2. Credit Note is usually sent for reasons such as low stock & high taxes.
Ans. The given statement is False. Typically, credit notes are sent because of incomplete, damaged, inaccurate goods sent.
Q3. Credit Note may also be used in case of cash sale returns.
Ans. The given statement is False. Cash sale returns do not attract credit notes. As a result, they are used with returns made on credit sales.
Q4. The seller updates the “Sales Returns Book’ on the basis of a debit note.
Ans. The given statement is False. The seller updates a ‘sales return book’ based on a credit note.
Q5. Credit Note is issued for the value of goods _____.
Ans. A credit note is issued to the buyer by the seller for the value of goods that have been returned. The buyer returns the goods to the seller.
Q6. Credit Note shows a _____ currency value (amount).
Ans. It shows a negative amount with the words (credit note).
Q7. Credit Note reduces _____ for the seller.
Ans. When the seller sends the buyer a credit note it reduces the seller’s current assets (receivables).
Q8. Credit Note reduces _____ in books of the _____.
Ans. A credit note is a document that reveals details about returned goods and cancels the related payables for the buyer. On the other side, this means that the debtors (receivables) are being reduced for the seller.
Q9. _____ will cancel the respective receivable upon sending a credit note.
Ans. Credit Note cancels the respective debt owed by the buyer, so the seller expects no further payments.
Q10. Credit Note is a document sent by a _____ to confirm the details of goods returned.
Ans. A credit note is a document issued to the buyer by the seller as confirmation of the returned goods.