The following explains how to create a new Credit Memo
First, click on the Sales topic in the Main Menu. Then click on New Credit Memo. Now a form appears with the label, "Find the Customer for this Credit Memo." This is a search form that you may use to find a Customer for the Credit Memo. Once you have selected a Customer, you may now select an item/s that you wish to create a Credit Memo for. Now you only have to enter the remaining data to complete the Credit Memo form before taking an Action such as Posting it.