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GCE Commerce 1990 Question 12

Question 12

Purchase and Sale of Goods

The purpose of issuing a credit note is to

  1. A.correct errors of overcharging
  2. B.correct errors of undercharging
  3. C.write off bad debts
  4. D.encourage immediate payment
  5. E.encourage bulk buying
Show the answer and explanation

Answer: A (correct errors of overcharging)

Explanation

A credit note reduces what the buyer owes, e.g. when he was overcharged or returned goods.