What is a "Credit Memo" used for in QuickBooks?

A "Credit Memo" in QuickBooks serves the purpose of issuing credit back to a customer's account, typically in situations where goods have been returned or when there has been an overpayment. This document ensures that the customer's account reflects the correct balance and acknowledges that they are owed a certain amount back, allowing for a seamless resolution of billing issues.

Using a credit memo allows businesses to accurately adjust financial records and helps maintain positive customer relationships by providing a structured approach to handling returns or overpayments. This feature not only simplifies the accounting processes but also ensures compliance with reporting standards, as it correctly tracks liabilities owed to customers.

The other choices do not accurately represent the function of a credit memo. Requesting payment from a customer involves using an invoice or statement, adjusting inventory levels is handled through adjustments or inventory management functions rather than a credit memo, and recording an increase in revenue pertains more to sales receipts and invoices, not credit memos.