You might issue refunds because your customer returned what they bought, you overcharged your customer, or your customer overpaid you. There may be other instances but those are the first three that come to mind. The answer depends on your particular circumstance. If you sold an inventory item which was returned for refund, then you would enter a credit memo to your customer, which would effectively receive the returned product back into inventory, and set up the credit on the customer's account for refund. If you were overpaid, then the credit on the customer's account would be offset with your refund check. But these are different entries. Please respond with more details to get an answer for your situation.