DEBIT MEMO IN AP
Suppose you purchased 10 items of worth 10*10 = 100 rs.
but after receiving of item you now need only 9 items and you want to return 1 item to supplier what you do is you create a DEBIT MEMO for -1*10 = -10RS and send to the supplier
once we receive a response from supplier then we generate a invoice for the remaining 9 items and make the payment
CREDIT MEMO IN AP
Same above scenario after receiving PO from our company if the supplier has only 9 items and he does not have one item then he generates credit memo worth -10RS and send to our company