Which action applies an existing credit memo to an invoice?

• A. Refund the customer.
• B. Apply the Credit Memo to the relevant invoice.
• C. Create a Credit Memo.
• D. Void the credit memo.

Answer: (B)

Applying an existing credit memo to an invoice uses the credit to offset the amount due on that invoice, reducing the total the customer needs to pay and updating their balance accordingly. This is the right action because it directly applies the pre-existing credit to the specific invoice, rather than issuing cash back, creating another credit, or canceling the original credit. For example, if an invoice is for 100 and there’s a credit memo for 25, applying it would bring the due amount to 75. If the credit is larger than the invoice, any remaining credit may appear as a balance on the customer’s account for future invoices.