General info Flashcards

Question

DRS Definition

Answer 1

Dispute Resolution System

Answer 2

If the buyer returns the goods, the seller usually issues a credit memo for the same or lower amount than the invoice, and then refunds the money to the buyer, or the buyer can apply that credit memo to another invoice.

Answer 3

When a company fails to pay or short-pays an invoice, it is common practice to issue a debit memo for the balance and any late fees owed. In function, debit memos are identical to invoices.

Answer 4

One type of credit memo is issued by a seller in order to reduce the amount that a customer owes from a previously issued sales invoice. For instance, assume that SellerCorp had issued a sales invoice for $800 for 100 units of product that it shipped to BuyerCo at a price of $8 each. BuyerCo informs SellerCorp that one of the units is defective and SellerCorp issues a credit memo for $8. The credit memo will cause the following in SellerCorp's accounting records: 1) a debit of $8 to Sales Returns and Allowances, and 2) a credit of $8 to Accounts Receivable. In other words, the credit memo reduced SellerCorp's net sales and its accounts receivable. When BuyerCo records the credit memo, the following will occur in its accounting records: 1) a debit of $8 to Accounts Payable, and 2) a credit of $8 to Purchases Returns and Allowances (or Inventory).

Answer 5

Reason code Check number, from the original posting Batch number, from the original check posting Distribution channel, the one that is extended to the customer, make sure the BA is correct Sold to Customer, optional

Answer 6

Credit and debit memos are requested during order processing in Media Sales and Distribution and are used to clear amounts that are to be reimbursed or additional costs incurred. Like billing documents, credit and debit memos are recorded as documents in Media Sales and Distribution. Use Requests for credit and debit memos Credit and debit memo documents always refer to order items. They are requested by the administrator during order processing (e.g. by selecting the relevant indicator). Generation of credit and debit memos during billing can be triggered by the following requests Credit memo for suspension or partial suspension of an order item Debit memo for increased shipping costs for a redirection Credit memo for termination before the end of a period for which billing was already performed Credit memo for a complaint (created automatically for the complaint quantity or manually) Credit memo for returns (created automatically for the return quantity) Billing for credit and debit memos Billing for credit and debit memos is performed in the same way as for billing documents. Corresponding billing document types are defined in Customizing for credit and debit memos. Credit and debit memo items are listed as separate items in the billing document.

Answer 7

Organizational unit of external accounting that corresponds to a specific business segment or area of responsibility in a company. Movements in value entered in Financial Accounting are assigned to business areas. Financial statements can be created for business areas for internal purposes.

Answer 8

A bank credit memo is an item on a company's bank statement that increases a company's checking account balance. A bank debit memo is an item on the bank statement that reduces the company's checking account balance. Since these items are already on the bank statement, the only adjustment that could be required is in the company's accounting records. The old rule for the bank reconciliation "Put it where it isn't" means that the bank's credit memo amount must be added to the company's accounting records, if it is not yet in the company's accounts. Since the bank credit memo increased the checking account balance, the company's Cash account will have to be debited and another account will need to be credited. For example, if the bank statement shows a credit memo for $100 for interest earned, the company will need to have a debit of $100 in its Cash account and will need a credit of $100 in Interest Revenue or Interest Income. If the bank statement shows a debit memo of $25 for a service fee, the bank statement balance was decreased by $25. As part of the bank reconciliation process the following entry must be made if the item has not yet been recorded in the company's records: debit Bank Fee Expense or Miscellaneous Expense $25 and credit Cash $25. The company's Cash account needs to be credited because this company's asset account decreased. The reason the bank used "debit" to decrease the company's checking account is that its customers' checking account balances are liabilities for the bank. (The bank's cash was debited when customers deposited money and the bank's liability account Demand Deposits or Checking Account Deposits was credited.) When the bank pays a customer's check, the bank's cash is reduced and the bank's liabilities are reduced. The bank records this with a credit to Cash and a debit to Demand Deposits.

General info Flashcards

(32 cards)