Best Practice for Handling Customer Down Payment Invoice in Oracle Receivables R12

Hello Experts,

I would like to ask about the best practice for handling customer down payment (advance payment) invoices in Oracle Receivables R12.

Here is the business scenario:

1. Accounting entry:
   • Dr Accounts Receivable
   • Cr Customer Advance (Liability)
   • Cr Tax
2. Accounting entry:
   • Dr Accounts Receivable
   • Cr Revenue
   • Cr Tax
3. Since the customer has already paid the down payment, we need to clear the advance against the final invoice.

Expected accounting entry:

• Dr Customer Advance
• Dr Tax
• Cr Accounts Receivable

My questions are:

1. What is the recommended approach in Oracle AR R12 to handle this scenario?
2. Is it better to use:
   • Credit Memo