Meaning of debit note in tally accounting
What is debit note? And why debit note is used in tally? Debit note means purchase return. In simple words, the definition of debit note is given, then when a buyer buys an item from a seller and if for some reason that item is returned by the buyer to the seller, then it is called debit note. This is called a purchase return for the buyer. A debit note is a document issued by seller which is sent to the buyer. If the buyer wants, he can take money instead of debit note or can buy, it depends on the buyer and seller. When invoice is given to the customer by sales, it is also called debit note.
Understanding debit note in tally
Debit note can also be called purchase return, for this let us explain debit note with example. abc is a company that works in computer sales. If computer sales of 250,000/- were sold by abc company to xyz company which is its customer. If for any reason xyz company returned 100,000/- computers to abc company then it will be called as purchase return. In this situation a debit note will be issued by abc company to xyz company which will have all the information related to purchase return. In lieu of debit note by abc company, xyz company has to pay money and if xyz company wants, then instead of debit note, you can buy from abc company.
The purchase return is direct income for the buyer but direct expenses for the seller. While entering the debit note in tally, if the purchase is returned by the company, its entry is done in the debit note voucher. and the accountant of the company to which the purchase return has been made has to be entered in the sales return. The debit note is for the buyer but for the seller it is called credit note.
There can be many reasons for debit note. But it often happens that when a purchase is returned by a customer, some discount is given by the company to the customer so that the customer does not return the purchase. When the discount is received by the customer, the purchase is not refunded by the buyer. when less amount is taken from the buyer by the company then it is called discount to the buyer and when the discount is entered by the buyer in tally then the company The account is debited and discount is credited which is the indirect income of the buyer.
Reason of debit note in business
There can be many reasons for a purchase return in any business. Or it is not necessary that the quality of the goods can be bad. Sometimes customers may also intentionally refund the purchase. Some examples of purchase return are given below.
1. Face to face purchase: – This happens when big companies show only a sample of their product to their customer. And when the customer does not get the ordered goods or there is a defect in the item, then the company has to bear the problem related to the purchase return.
2. Online Purchasing :- Nowadays, online purchases are being done more by the customers. In this, the customer does not have to go to the sales and only order after selecting the item according to him, after that the item is made available to the customer’s house. Many things happen that the item mentioned by the company is not sent to the customer. If the customer is not satisfied, the item is returned.
3. Tele Purchasing: – In this purchase, there is a conversation between the saler and the buyer over the phone or mail and the product or item is sent to the customer, in case the item is not understood, the customer can return the purchase.
4. Customer problem: – Many times the customer intentionally returns the purchase due to lack of money or the price of the item is high.
Debit note entry in tally
Before entering the purchase return, the accountant has to first enter the purchase in the tally, after that if the purchase has to be returned due to any reason, then the entry of purchase return is made. For this let’s take the example of computer. 150,000/- computers were purchased by abc from xyz company. So first the accountant will be entered in the tally for the first computer purchase. While making the entry, the accountant will be debited the computer with 150,000/- and xyz company will be credited with 150,000/-.
If the purchase of 50,000 / – by abc is returned to xyz, then for this the accountant will have to make an entry in the debit note voucher. In the entry xyz company has to debit 50,000/- and credit the purchase return a/c. The buyer can take money in exchange for the purchase return or can buy another item.
What are the difference between debit note and credit note
In relation to purchase in any business, credit note and debit note are opposite to each other. Where credit note is related to sales return, then debit note is called purchase return. They are very important in any business. When companies maintain their account book in tally, debit and credit are maintained in tally. So that the calculation of any company can be done easily and accurately.