Which document is typically issued for returns or overcharges?

• A. Debit note
• B. Invoice
• C. Credit note
• D. Receipt

Answer: (C)

When goods are returned or there’s an overcharge, the business records the adjustment with a credit note. This document shows that the customer’s liability is reduced or that a refund is due, often referencing the original invoice and the reason for the adjustment. It effectively credits the buyer’s account and can also adjust VAT if applicable, helping keep both sales and accounts receivable accurate. A debit note is the opposite action (used by buyers to request a credit), while an invoice is the original charge and a receipt is proof of payment. So, the credit note is the appropriate document for returns or overcharges.