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hello in this lecture we will define credit memorandum according to fundamental accounting principles while 22nd edition the definition of credit memorandum is notification that the issuer sender has credited the recipients account in the senders record so know what we have here is a credit memorandum with the term credit within it what that means to the customer is that the customer owes us money and the company then is reducing the amount that is owed for whatever reason the credit in the term credit memorandum really still only means the amount on the right hand side of the ledger of that ledger being the accounts receivable ledger related to a particular customer and if we credit it thats how were reducing that ledger amount so lets take a look at an example if we had a customer that was to purchase inventory and gave us an IOU the transaction for the purchase would be that we would have a count Steve will go up sales go up and the inventory side inventory would go down and co
