Thank you for the reply. No problem with dates of transactions vs. report date.

Perhaps some more information / details would be helpful to those attempting to assist me.

When reviewing the Vendor Balance Detail Report  both transactions appear and which (if I'm understanding the process correctly) would, if properly linked, then disappear.

1. Looking at a Vendor Transaction Detail Report, if one clicks on any line item, you can see both the Deposit and the Vendor Credit available to be utilized at the right hand side of the view.

2. This fact tells me that (per the various Help Articles) all one needs to do is either "Write a Check" or Pay a Bill" in order to link the two.

3. So a moment ago, I executed a Pay Bill transaction which then linked the two and they now show up in the Vendor Transaction Details Report. And now (again) both the Debit and the Credit are appearing in the Unapplied Cash Bill Payment Expense Category on the P&L Report.

4. All dates are the same. There are no outstanding Vendor Bills. there is nothing listed in the A/P Aging Report.

5. This tells me the transactions have been properly linked and the "issue" should be resolved.

However - - - - - - -

And yet the two transactions (the Credit Memo and the Deposit are being reported on the Unapplied Cash Bill Payment Expense Category line item of the P&L Report.

That is the situation / problem. 

All suggestions on how to resolve this "quirk" are appreciated.

TIA