Debit and Credit Notes.

 Debit and credit notes are used in accounting to adjust financial transactions that have already been recorded in a company's books.

A debit note is issued when a company needs to increase the amount owed to a supplier or vendor. This could happen, for example, if the company received goods or services that were more expensive than originally agreed upon, or if there were additional fees or charges that were not included in the original invoice. In this case, the supplier or vendor issues a debit note to the company, which the company will then use to adjust its accounts payable balance.

A credit note, on the other hand, is issued when a company needs to decrease the amount owed to a supplier or vendor. This could happen if the goods or services provided were defective, damaged, or not delivered as promised, or if there was an overpayment made on the original invoice. In this case, the supplier or vendor issues a credit note to the company, which the company will use to adjust its accounts payable balance.

Debit and credit notes are important because they allow companies to keep accurate records of their financial transactions and to ensure that they are paying the correct amount for goods and services received. They also help to resolve disputes and issues that may arise between companies and their suppliers or vendors.