Read the given below two statements and mark the correct answer.

Assertion (A): Credit note is prepared by buyer.
Reason (R) : The source document for recording entries in the sales return book is generally the credit note.

Assertion (A) is false but Reason (R) is true

The correct answer is option 4- Assertion (A) is false but Reason (R) is true.

Assertion (A): Credit note is prepared by buyer. THIS IS INCORRECT as Credit note is prepared by seller. On receipt of goods from the customer, a credit note is prepared, like the debit note. The difference between the credit note and the debit note is that the former is prepared by the seller and the latter is prepared by the buyer. Like the debit note, the credit note is also prepared in duplicate and contains detail relating to the name of the customer, details of the merchandise received back and the amount. Each credit note is serially numbered and dated. The source document for recording entries in the sales return book is generally the credit note.

Reason (R) : The source document for recording entries in the sales return book is generally the credit note. THIS IS CORRECT.  Sales Return (Journal) Book is used to record return of goods by customers to them on credit. On receipt of goods from the customer, a credit note is prepared. Each credit note is serially numbered and dated. The source document for recording entries in the sales return book is generally the credit note.