Credit memos are created when a product is returned. Credit memos reduce accounts receivable by crediting the account, and it writes off the invoice. This also records a debit to the Sales Returns and Allowances account.

If you have noticed that the A/R clerk has created an abnormally high number of credit memos and you also notice the inventory does not reflect the additional inventory resulting from the sales returns. What would you do, and how would you document your decision?Whats the best course of action in this case scenaririo?