Option a.'s credit memos from the bank show that the bank has settled the customer's note receivable.
Credit notes or credit memos are terms used to describe business documents that are issued by sellers to buyers. Credit notes are used as a source document in the sales return diary. In other words, the credit note serves as evidence of a decline in sales.
A seller may offer a credit memo to reduce a customer's remaining debt from an earlier sales invoice. A different type of credit note or credit memorandum is issued by a bank when it increases a depositor's checking account for a specific transaction.
Vendors provide credit notes to make up for prior invoice errors, cover overpayments or cover the cost of returned products.
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