okay, I tried this method, and it cleared out the A/P but left two negative amounts in the Vendor history. So, it basically changed the vendor history by the amount x2... It did eliminate the open A/P balance. but the vendor balance is not offset - I've got the negative for the Vendor credit created and another one for the Deposit. But on the P&L for the year it appears correct. But you have to number the check you create - QBO made me enter a ck number... when it's really not a check...

Background. My history for this transaction the Client created a bill for orig. expense, and paid it. So the Vendor history screen has a +50 and a -50. This was a deposit on a utility exp. by a builder on a property.... 

 Well, then the Vendor history screen after this method

1.Enter the Vendor Credit and

2. Enter Deposit for the refund and

3. Enter a check Bill Payment transaction to connect the bank deposit to the vendor credit,

results in the P&L Expense (in my case COGS) was reduced by this refund... Which is correct, (just print a P&L YTD and you can see your result of these transactions...

I had printed different QB reports to try and trace these transactions through to see if they resulted in the correct end result. I looked at "Transaction list by vendor" "Transaction Report" and "Purchases by Vendor Detail" to try and see these transactions, and you have to be careful to examine each entry on those reports because all entries you make are not all P&L expense accts.