Malcolm Ziman
Level 10

Manage Customers and Income

"Click the Plus (+) icon on the upper-right corner.
Select Refund Receipt."

No, don't use a Refund Receipt; that reduces income which was already done with the c/memo.
The account allocation of the Expense or Cheque should be Accounts Receivable (Debtors). Then create a zero Receive Payment to apply the debit to the credit