Home Tutorials Videos Q&A MCQ Shortcuts Exercises Appointment Login
Tutorial Exercises MCQ Test Interview Q&A
Lesson 19 of 48 – Debit Note
38%

📑 Debit Note in Tally Prime

A Debit Note is issued by the buyer to the supplier when purchased goods are returned, damaged, received in short quantity, or when the supplier has charged an excess amount.

Lesson Objective Learn how to record Purchase Returns, supplier adjustments and Debit Notes in Tally Prime using Ctrl + F9.
1. What is a Debit Note?

A Debit Note is a document sent to the supplier informing them that the amount payable has been reduced because goods have been returned or adjustments are required.

Reason Use Debit Note?
Purchase Return ✔ Yes
Damaged Goods Received ✔ Yes
Short Quantity Received ✔ Yes
Supplier Overcharged ✔ Yes
Cash Payment ❌ No
2. Shortcut Key
Voucher Shortcut Key
Debit Note Ctrl + F9
Gateway of Tally → Voucher Entry → Press Ctrl + F9
3. When is Debit Note Used?
Situation Debit Note
Returned Purchased Goods ✔ Yes
Wrong Purchase Price ✔ Yes
Goods Damaged During Transport ✔ Yes
Supplier Sent Extra GST ✔ Yes
Sales Return ❌ Credit Note
Debit Note is always related to purchases and suppliers.
4. Example – Purchase Return

Returned goods worth ₹10,000 to ABC Traders because they were damaged.

Debit Credit
ABC Traders ₹10,000 Purchase Return ₹10,000
The supplier's outstanding balance decreases after issuing the Debit Note.
5. Example – Excess Purchase Price

Supplier charged ₹2,000 extra by mistake.

Debit Credit
Supplier A/c ₹2,000 Purchase Adjustment A/c ₹2,000
A Debit Note informs the supplier that the payable amount has been reduced.
6. Debit Note with GST

When purchased goods are returned, the GST paid on those goods must also be adjusted. Tally Prime automatically adjusts GST if GST is enabled.

Example

Returned goods worth ₹10,000 (GST @18%).

Particular Amount
Purchase Return Value ₹10,000
CGST (9%) ₹900
SGST (9%) ₹900
Total Debit Note ₹11,800
Tally automatically reverses the Input GST Credit when the Debit Note is recorded.
7. Purchase Return Scenarios
Situation Action
Damaged Goods Return goods and create Debit Note.
Wrong Product Received Issue Debit Note.
Short Quantity Received Debit Note for missing quantity.
Poor Quality Material Return to supplier.
Supplier Overcharged Issue Debit Note for price difference.
Debit Note helps maintain accurate supplier accounts and inventory records.
8. Steps to Record a Debit Note
  1. Open Tally Prime.
  2. Go to Voucher Entry.
  3. Press Ctrl + F9 for Debit Note.
  4. Select the Supplier Ledger.
  5. Select the Purchase Return Ledger.
  6. Select the Stock Item (if inventory is enabled).
  7. Enter Quantity and Rate.
  8. Verify GST Adjustment.
  9. Enter Supplier Invoice Reference and Narration.
  10. Press Ctrl + A to Save.
Always match the Debit Note with the original Purchase Invoice before saving.
9. Important Fields in Debit Note
Field Description
Date Debit Note Date
Supplier Ledger Supplier Name
Purchase Return Ledger Purchase Return Account
Stock Item Returned Product
Quantity Returned Quantity
Rate Purchase Rate
GST GST Adjustment
Supplier Invoice No. Original Invoice Reference
Narration Reason for Return
Entering complete information helps during supplier reconciliation and GST return filing.
10. Common Mistakes While Recording Debit Note
Common Mistake Correct Practice
Using Purchase Voucher instead of Debit Note. Use Ctrl + F9 for Purchase Returns.
Selecting the wrong Supplier. Verify the Supplier Ledger.
Wrong Quantity Returned. Match with returned goods.
Incorrect GST Rate. Verify GST reversal.
Wrong Purchase Return Ledger. Select the correct Purchase Return Account.
Missing Invoice Reference. Enter the original supplier invoice number.
No Narration. Mention the reason for the return.
Saving without verification. Review the complete Debit Note before pressing Ctrl + A.
Incorrect Debit Notes can affect Supplier Outstanding, Stock Quantity, GST Input Credit and Purchase Reports.
11. Real Business Case Studies

Let's understand how Debit Notes are used in different businesses.

Business Situation Action Taken
Retail Shop Received damaged grocery items Issued Debit Note
Medical Store Expired medicines returned to supplier Issued Debit Note
Electronics Shop Defective Laptop returned Issued Debit Note
Garment Store Wrong size products received Issued Debit Note
Manufacturing Company Raw material not matching specifications Issued Debit Note
Computer Institute Damaged Computer Books returned Issued Debit Note
Debit Notes help businesses maintain accurate supplier balances and inventory records.
12. Debit Note vs Credit Note vs Purchase Voucher
Debit Note Credit Note Purchase Voucher
Purchase Return Sales Return Purchase Entry
Issued by Buyer Issued by Seller Records Purchases
Ctrl + F9 Ctrl + F8 F9
Reduces Supplier Outstanding Reduces Customer Outstanding Creates Supplier Outstanding
Reduces Stock Increases Stock Increases Stock
Easy Trick
  • 📦 Purchase Return → Debit Note
  • 🔄 Sales Return → Credit Note
  • 🛒 New Purchase → Purchase Voucher
13. Professional Tips & GST Adjustments
  • Verify the supplier invoice before issuing a Debit Note.
  • Return only the actual damaged or incorrect quantity.
  • Always mention the reason for the return.
  • Verify GST reversal carefully.
  • Match returned stock with inventory records.
  • Use Bill-wise Details for proper supplier adjustment.
  • Keep transport documents and return challans safely.
  • Regularly reconcile supplier accounts.
  • Review Debit Notes before filing GST Returns.
  • Maintain proper documentation for audits.
Professional accountants always attach the supplier invoice, delivery challan and return note with every Debit Note.
14. Practical Exercise & Interview Questions
Practical Exercise
  1. Create a Debit Note for Purchase Return.
  2. Return damaged goods worth ₹8,000.
  3. Create a Debit Note with GST Adjustment.
  4. Return goods due to wrong quantity.
  5. Adjust excess amount charged by supplier.
  6. Verify Stock Summary after return.
  7. Verify Supplier Outstanding Report.
  8. Check GST Input Credit after Debit Note.
Interview Questions
  1. What is a Debit Note?
  2. Which shortcut key opens Debit Note?
  3. When is Debit Note used?
  4. Who issues a Debit Note?
  5. What is Purchase Return?
  6. Difference between Debit Note and Credit Note?
  7. Difference between Debit Note and Purchase Voucher?
  8. How does Debit Note affect Supplier Outstanding?
  9. How does Debit Note affect Inventory?
  10. How does Debit Note affect GST?
  11. Can Debit Note be used for Sales Return?
  12. What documents are required before issuing a Debit Note?
  13. Why is narration important?
  14. Can Debit Note be altered after saving?
  15. What reports are updated after a Debit Note?
  16. How is Bill-wise Detail used?
  17. What precautions should be taken before saving?
  18. What is GST reversal?
  19. Why should supplier reconciliation be done?
  20. Why is Debit Note important in accounting?
15. Lesson Summary
  • Learned the purpose of Debit Note.
  • Recorded Purchase Returns.
  • Adjusted Supplier Outstanding.
  • Learned GST Reversal.
  • Reduced Inventory after returns.
  • Recorded damaged and short-supplied goods.
  • Compared Debit Note, Credit Note and Purchase Voucher.
  • Learned professional accounting practices.
  • Completed practical exercises.
  • Prepared for accounting interviews.
Congratulations! You can now confidently record Debit Notes (Ctrl + F9) in Tally Prime for purchase returns, supplier adjustments and GST reversal.

🧠 Quick Quiz

Which shortcut key is used to open the Debit Note in Tally Prime?



← Previous Next →