@Rainflurry I spent over an hour on the phone with QBO customer support this morning and got no where with my question.  They gave me a work around, but it did not accomplish what I was trying to do.  Your information was perfect.  The item for which I needed to prepare a credit memo now appears in my cost of goods sold because your instructions for how to set up the product/service item was spot on.  That is exactly what I had been trying to do, but didn't know to select the expense account for the income account.  Thank you so much!!