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In this lecture, the concept of a credit memorandum is defined according to the 22nd edition of Fundamental Accounting Principles. A credit memorandum serves as a notification that the issuer has credited the recipient's account in their records, indicating that the recipient owes money to the issuer. The term "credit" reflects a reduction in the amount owed. Specifically, it affects the accounts receivable ledger related to a customer, decreasing the ledger balance. An example is provided: when a customer purchases inventory and provides an IOU, the transaction results in an increase in the accounts receivable and sales, while the inventory decreases.