Question

What are some possible reasons a credit would show up on your accounts receivable (A/R) run?

1) Payment made by a customer for an invoice
2) A refund issued to a customer for a returned product
3) An adjustment made to correct a billing error
4) A credit memo issued for a discount or promotional offer

Answer 1

A credit on an accounts receivable (A/R) run can occur due to a customer's payment, a refund for a returned product, an adjustment for billing errors, or a credit memo issued for discounts or promotions.

Step-by-step explanation:

There are several reasons a credit might show up on an accounts receivable (A/R) run. The most common reasons include:

1. A payment made by a customer for an invoice.
2. A refund issued to a customer for a returned product.
3. An adjustment made to correct a billing error.
4. A credit memo issued for a discount or promotional offer.

Each of these cases affects the accounts receivable balance. When a payment is made, it reduces the outstanding balance as the customer has fulfilled their debt. Issuing a refund or an adjustment results in the company crediting the customer's account, decreasing the overall receivable. Similarly, a credit memo reflects a reduction in the amount owed by the customer, often used for sales promotions or to rectify overbilling.