What is a form prepared by a customer that shows a price deduction for returns or allowances called?

The correct response is a debit memorandum. A debit memorandum is a document that a customer uses to request a price deduction due to returns of goods or to formally acknowledge allowances that may apply to their account. By issuing this form, the customer effectively communicates to the seller that there has been a reduction in the purchase amount due to factors such as product returns or discounts for damaged goods. This creates a record in the accounts that will adjust the customer's balance accordingly.

In contrast, a credit note typically refers to a document issued by a seller to a buyer, indicating a reduction in the buyer's account balance, usually in response to returns. An invoice is a document that details the sale transaction and the amounts due. An account statement summarizes the transactions in a customer's account over a specific period but does not specifically denote returns or allowances. Thus, the debit memorandum is the appropriate document used by customers to reflect price adjustments related to returns or allowances.