Distinguish Between Debit and Credit Note - Difference

Difference Between Debit and Credit Note

The difference between debit and credit note is explained as follows:

1. Meaning

Debit note is a note sent by one party to another informing him that his account is debited in the sender's book.

Credit note is a note sent by one party to another informing him that his account is credited in the sender's book.

2. Details

Debit note contains details as to why the party is debited and the amount of debit.

Credit note gives details as to why the party is credited and the amount of credit.

3. Acknowledgement

Debit note requires an acknowledgement from the receiver by a credit note.

Credit note requires an acknowledgement from the receiver by a debit note.

4. Written in which Ink?

Debit note is usually typed or written in blue ink.

Credit note is usually typed or written in red ink.

5. When Note is Sent?

When Debit Note is sent?

1. Debit note can be sent by buyer when he is overcharged.
2. It can be sent by buyer when he returns back the goods.
3. It can be sent by the seller when he has undercharged the buyer.

When Credit Note is sent?

1. Credit note can be sent by the seller when he has overcharged the buyer.
2. It can be sent by the seller when he receives back the goods.
3. It can be sent by buyer when he has been undercharged.

6. Effect of Note

The effect of a debit note is that the debit account gets more debited and credit account gets reduced.

The effect of a credit note is that the credit account gets more credited and debit account gets reduced.