What is credit note in tally accounting
Meaning of credit note in tally
What is a credit note in Tally? When a customer returns the item purchased on credit or in cash to the seller, this process is called sales return. A credit note is sent by the seller to the buyer as a notification to prove that the goods have been returned. Tally contains the expenses for the credit note seller. In lieu of credit notes, the customer can also make purchases from the seller or can also receive cash. On a credit note, if the item was purchased by the customer on credit, then it reduces the amount credited by the customer.
Understanding credit notes in tally
In Tally, the meaning of sales return or credit note is the same. To explain the credit note, let me give you the example of a computer shop. There is a computer shop named Abc. Rahul bought computers worth 250000/- from the shop. If the computer of 50000/- is defective due to any reason or turns out to be broken, then in such a situation, ABC computer shop will be informed by Rahul.
In such a situation ABC computer shop issues a credit note in the name of Rahul. After issuing the credit note, only Rs. 200000/- will be charged from Rahul by ABC computer shop. There can be many reasons for the sales return, such as a company has sold bad goods to its customer. There has been a shortage of goods. There is a defect in the goods. There can be many reasons etc., due to which the sales return occurs. If the purchases are made by the customer in credit, then the credit of the customer is reduced by the credit note and it becomes a direct expense for the company or shop.
credit note entry in tally accounting
Sales return or credit note is the same in tally. Before entering a credit note in tally, the accountant has to enter sales in his tally books. If a customer has made a purchase of Rs. 50000/- from the shop, then the first entry of sales of Rs. 50000/- will be made by the accountant. And if for any reason the purchase of Rs. 10000/- will be returned by the customer, then in this case the sales return of Rs. 10000/- will be entered in tally by the accountant. The credit note will be adjusted by the accountant against the invoice itself. If the item has been sold by the seller by applying GST, then it is mandatory to apply GST in the entry of sales return also. The entry for sales and sales return is shown below
debit note and credit note in tally
In Tally, debit notes and credit notes are opposite to each other, there is a debit note purchase return, the same credit note is called sales return. In any transaction of business always two persons are affected in which one being the buyer and the other person being the seller. The debit note and credit note are not the same for both persons. If an item is a purchase return for the buyer, then there will be a sales return for the seller. But for all these, it is necessary to have buyer and seller.