An ARC participating carrier may issue a debit memo to what purpose?

An ARC participating carrier may issue a debit memo to what purpose?

• A. To collect money for a ticket transaction that was issued for an incorrect fare
• B. To refund a ticket due to service disruption
• C. To adjust taxes
• D. To issue a travel voucher

Answer: (A)

Debit memos in ARC are the accounting tool used when a ticket is issued with an incorrect fare and money is owed as a result. When a ticket ends up with a fare amount that doesn’t reflect the approved or correct price, the carrier needs to recover the difference. The debit memo serves as the formal request for that payment, moving funds from the party responsible for the error (typically the selling agency/issuer) to the carrier. It’s a settlement document aimed at correcting revenue, not a method for refunds to passengers, tax adjustments, or issuing travel vouchers. For example, if a ticket should have been charged $180 but was issued at $230 due to an error, a debit memo would be used to collect the $50 difference from the entity that issued the ticket.

Debit memos in ARC are the accounting tool used when a ticket is issued with an incorrect fare and money is owed as a result. When a ticket ends up with a fare amount that doesn’t reflect the approved or correct price, the carrier needs to recover the difference. The debit memo serves as the formal request for that payment, moving funds from the party responsible for the error (typically the selling agency/issuer) to the carrier. It’s a settlement document aimed at correcting revenue, not a method for refunds to passengers, tax adjustments, or issuing travel vouchers.

For example, if a ticket should have been charged $180 but was issued at $230 due to an error, a debit memo would be used to collect the $50 difference from the entity that issued the ticket.