DEBIT & CREDIT NOTES

a debit note is issued by a buyer to the seller, when he returns the goods that he may have purchased. The impact is, that he credit  purchases account and debits the creditor account in his books. And expects the creditor to make the corresponding entries in his books.

A credit note is issued by a seller to a customer, when the customer returns the goods purchased. It is a intimation that the customer's account has been credited and as a result his liability has reduced.

nikhil u replied well but debit & credit notes are not issued only for the purpose (as explained by u). these may be issued for various other reasons also (e.g. quality & quantity discount, difference in calculation of invoice amount etc.). and both debit & Credit notes can be issued by either parties.

Accounting : in the books of issuer of debit nots

concerned party (to whom debit note is issued)'s a/c      Dr.

              To  P/R or quality & quantity disc. etc.

Accounting : in the books of receipent of Debit Note:

S/R or quality & qty. disc. etc..   a/c Dr.

 To concerned party (from whom the Dr. Note is received)'s a/c.

similaly in the case of credit note (but opposite).

these are the single(consolidated) entry. it may also be done in two different entries alternatively. 

accountin in the books of receipnt of Dr. Note

1.  Dt. Note A/c     Dr.

                 To Party

2.  Reason (what ever) a/c      Dr.

                  To Dr. Note

 please keep in mind entries are made according to the purpose for which Dr./Cr. Notes are issued

thank you Sir,

honestlt, i didn't know the other reasons for which debit and credit notes are prepared...thanks for the info....