In case of an overcharge which of the following documents is issued?
Last updated Jun 24, 2026
Correct Answer:
Option B —
Credit note
When a customer is overcharged (meaning they were billed for more than they should have been), the seller issues a Credit Note. This document effectively reduces the amount the customer owes or provides them with a "credit" for future purchases.
Why a Credit Note is used: Correcting Errors: If the invoice price was too high or the quantity listed was greater than what was delivered. Returns: If a customer returns goods, a credit note "undoes" the previous charge .Discounts: If a post-sale discount is granted that wasn't included in the original invoice.
Why the other options don't fit:
A) Debit note: This is the opposite. It is issued when a customer is undercharged or when a buyer returns goods to a supplier and wants to show they owe less.
C) Bank note: This is simply legal tender (paper money/currency).
D) Ledger note: This is not a standard commercial document; a "ledger" is a book of accounts where transactions are recorded, but it isn't "issued" to customers.
Answer verified by Quintessence Classes faculty — Karan Nagar, Srinagar.
