Bola, UTC's regular customer, owed 1000 naira on account of a radio bought. If he sent in a cheque for 500 naira, UTC would send him a ____
Take Free Practice Test On 2026 JAMB UTME, Post UTME, WAEC SSCE, GCE, NECO SSCE
Correct Answer: Option A
Explanation:
In this case, Bola owes ₦1000 for a radio purchased on credit, and he is sending a ₦500 cheque to make a partial payment. Once UTC receives the payment, they would issue a credit note to acknowledge that ₦500 of the debt has been settled.
A credit note is issued to:
- Reduce the amount owed by the customer, which in this case, reduces Bola’s outstanding balance from ₦1000 to ₦500.
- It serves as a formal acknowledgment of the payment received and the amount deducted from the outstanding balance.
In this case, Bola owes ₦1000 for a radio purchased on credit, and he is sending a ₦500 cheque to make a partial payment. Once UTC receives the payment, they would issue a credit note to acknowledge that ₦500 of the debt has been settled.
A credit note is issued to:
- Reduce the amount owed by the customer, which in this case, reduces Bola’s outstanding balance from ₦1000 to ₦500.
- It serves as a formal acknowledgment of the payment received and the amount deducted from the outstanding balance.