Final answer:
The statement is false. Credit Memos are documents that correct transaction errors or account for returned goods, and they do not inherently decrease consistency or bottom line performance. Frequent issuing may indicate underlying issues that could affect the bottom line.
Step-by-step explanation:
The statement "Credit Memo decreases consistency and bottom line performance" is generally False. A credit memo, or credit memorandum, is a document issued by a seller to a buyer. It reduces the amount that the buyer owes to the seller under the terms of an existing invoice. Credit memos are most commonly issued when the buyer returns goods to the seller, or when there is an overcharging or other transaction error that needs to be corrected.
Credit memos do not inherently decrease the consistency or the bottom line performance of a company. They are a part of normal business operations and are used to reconcile accounts and correct discrepancies. The issuance of a credit memo will reduce revenue in the accounting period it is issued, but it also alleviates issues with customers and helps maintain good customer relations, which can be beneficial in the long term.
However, if a company is issuing credit memos frequently, it might indicate problems with their products or services, which could ultimately affect their bottom line performance. The key is to understand why the credit memos are being issued and to address any underlying issues to maintain the health of the business.