What is a bank credit memo?
submitted by Iris Oddit

RJ Fletcher

When a bank recognizes a debt to a depositor, it is a "credit" on the bank's balance sheet. When they credit your account, you get money, which is a debit on your balance sheet.

Arnold

A Credit to the Bank is liability to the bank, which is an asset to the depositor. When a bank issues a credit memo, it deposits money or makes a refund, benefitting the depositor.

RJ

A credit memo (aka a credit note) is the official notice from a business or a bank that documents a refund.

A business may lower their price for a product or service already rendered. In this case, they need to make a record of the partial refund. If the company lowered their price by $150, the credit memo would indicate a refund of $150 to the buyer. This helps both parties keep their records straight.

When a bank issues a credit memo, it's the same basic idea. If they need to return some money to you, they would issue a credit memo that shows how much you get from them.