What is a "Credit Memorandum" in GFEBS?

What is a "Credit Memorandum" in GFEBS?

• A. A document used to request additional funds
• B. A document used to reduce the amount owed by a debtor
• C. A document that outlines payment methods
• D. A document that terminates a debt

Answer: (B)

A "Credit Memorandum" in GFEBS is used to reduce the amount owed by a debtor. This document serves as an official record that adjusts the outstanding balance, indicating that the debtor's financial obligation has decreased. Credit memorandums can arise in various situations, such as when a returning product qualifies for a refund or when an adjustment is made due to an error in billing. By documenting these changes, organizations ensure accurate financial records and maintain transparent accounting practices. This is crucial for effective debt management, allowing both the creditor and debtor to have a clear understanding of their financial status.

A "Credit Memorandum" in GFEBS is used to reduce the amount owed by a debtor. This document serves as an official record that adjusts the outstanding balance, indicating that the debtor's financial obligation has decreased. Credit memorandums can arise in various situations, such as when a returning product qualifies for a refund or when an adjustment is made due to an error in billing. By documenting these changes, organizations ensure accurate financial records and maintain transparent accounting practices. This is crucial for effective debt management, allowing both the creditor and debtor to have a clear understanding of their financial status.