In handling a customer refund, these are the steps that you would normally follow (assumes a situation where the customer pays for an invoice but later returns all or a portion of it and will therefore be receiving a refund check):

1. Issue a credit invoice in the sales order option A program. For quantities indicate the amounts as negative amounts. The prices would be exactly the same as on the original order. The total invoice amount should end up equaling the amount of the original invoice (multiplied by a -1) unless the customer is returning less than what was received. Print the invoice and post it. The invoice date would typically be the date that the customer returned the merchandise. (If the amount involved related to an A/R voucher originally then you would instead create an A/R credit memo debiting the same G/L distribution accounts that were used on the original A/R voucher).
2. Under accounts payable option A, create a vendor record for the customer to whom you will be issuing a refund check (or you can do this "on the fly" in step (3) below (or you might create a generic A/P vendor code to be used for customer refunds - just be sure to update the "vendor" name and address which will print on the check if you will be printing an A/P check).
3. Create an accounts payable voucher (or a manual check) for the amount of the refund, e.g. the credit invoice amount created in step (1) in A/P-B. The critical step here is to use your ACCOUNTS RECEIVABLE general ledger code for the debit distribution. This will then offset the credit to accounts receivable that occurred through posting the credit invoice in step (1). Proceed to print and post the check as usual.
4. Inasmuch as you have issued a refund check for the amount of the credit invoice created in step (1), create an accounts receivable voucher under A/R-B. In this step the customer's account will be charged for the amount of the credit in order to zero out the account and reflect the fact that a refund check has been issued. Date the A/R voucher for the same date as the A/P voucher/check. In the description you may wish to reference the A/P or manual check number. The critical step again here is to use your ACCOUNTS RECEIVABLE general ledger for the credit distribution. A/R will be simultaneously debited and credited with a net effect of zero in this step.
5. The final step is to go to accounts receivable option C. While the customer's statement balance would reflect a zero, the credit invoice created in step (1) and the A/R "charge" voucher in step (4) have not been applied to one another and the customer file would reflect offsetting amounts in the "Inv:" and "Crdts" fields. You would therefore go into A/R-C for this customer code and use a "payment date" that is the same date as the refund check and A/R voucher. The check amount would be zero. When asked if you want to use all outstanding credits, answer "Y" (unless the outstanding credits number is something different then the credit invoice amount create in step (1)). Proceed to apply the credit invoice amount to the A/R voucher amount and save.

Future updates to Advanced Accounting may simply this process but the foregoing applies to all versions of Advanced Accounting as of the date of this technical support memo.