Thank you for that very explicit explanation with images.  Really helped understand.  (I am a visual learner!)

I do understand what you are saying about how to apply or not apply a credit.  But what I am questioning is how do I find out WHY I have a credit for a particular customer.  I don't know where to look for that.   I believe I have correctly identified all bank deposits for that customer and properly received payment for each invoice.  But obviously something is wrong because it keeps offering a credit for that customer.

I did learn from your explanation, tho, that a could use a credit memo in the situations where a customer gives a deposit toward future services.   Is that correct.   That credit will be there for their account and will show up when I do their invoice?

Thanks so much for your help.   I'm trying to learn the ins and outs of QBO.