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Program Description:
A debit memo is a charge against a vendor's account (Debit A/P). In the system it is treated pretty
much like an prepayment. The major difference is that a check doesn't have to be printed to affect the
vendor's account balance.
For example, you may bring some merchandise to a tour operator, instead of paying in cash. The
amount which the vendor values the merchandise is the amount of the debit memo.
A frequent use for debit memo entry is to correct errors in estimates or invoices after they have been
posted to A/P.
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Program Operation:
To start a new debit memo, type zero. To change a current debit memo, type the entry number.
Partially distributed debit memos may not be changed.
Then, enter the Vendor number and the Debit Description and amount. If the debit memo is in a
currency other than U.S. dollars, then you will be asked for the USD amount. This is the amount
posted to the General Ledger. Next, enter the A/P number to debit (Defaults to Vendor's default) and
the account to Credit (defaults to the prepayment default).
Note: To enter a negative amount against a tour, use invoice entry and type a negative amount (For a credit
invoice).
Note: Internally, debit memos are treated the same as prepayments. You must use the prepayment distribution
program to distribute the amounts to specific invoices.
G/L entries are created automatically:
1/15/86 Accounts Payable - Tours 500.00
Flight bag expense (decrease) 500.00
(Gave flight bags to tour operator)
This program is also used to fix estimates and invoices after they have been posted to A/P. You can
zero out the incorrect invoice by distributing a debit memo to it.
For example, say you enter a departure estimate for 910.00 rather than 190.00 and you didn't catch
it on the edit list. To fix it, enter a fake invoice for the 910.00, enter a debit memo for 910.00 and then
distribute the debit memo to the invoice to cancel it out. Go back and enter the correct departure
estimate. (Usually you wouldn't go through all this trouble for an estimate. You would only do it for
an incorrect invoice)
The entry from the debit memo posting would be:
4/12/86 Accounts Payable - Tours 910.00
Cost of Tours 910.00
(Reverse incorrect entry)