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Financial & Managerial Accounting
Found in: Page 205
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

Does the sender (maker) of a debit memorandum record a debit or a credit in the recipient’s account? What entry (debit or credit) does the recipient record?

Yes, the sender (maker) records a debit in the recipient’s account. On the other hand, the recipient should record a Credit sender account.

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Step by Step Solution

Definition of Debit Memorandum

A document issued by the buyer to the seller that reflects the debit made to the seller’s account is known as a debit memorandum. It reflects the refund of the amount or discount on purchases made.

Reporting debit memorandum

  1. Yes, the receipt account is debited by the sender because it reflects the reduction in the amount owed to the seller.
  2. Recipient credit the sender account because it reflects the reduction in the receivable amount.


Accounts and Explanation

Debit $

Credit $

Sales return and allowance

Accounts receivable - Sender

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