When entering items I am marking them as billable on a large project I haven't invoiced yet. There have been times I return an item to receive a refund or credit, but I am offered the option in QuickBooks to have this be marked as billable. If I do this, will it know that's actually a credit against that item category?
Thanks for posting a question here in the Community, @CCCBuilder.
Yes. Quickbooks will recognize it as a credit against your item inventory provided that you used the same item for that transaction.
Moreover, you'll also want to track your expenses per job and comparing it to your revenue, thus, I've added an article to learn more about Job Costing: Job Costing in QuickBooks Desktop. This way, you can monitor how much money you spend and get for each job.
Be at ease if you need anything else. I've always got your back. Have a good day!