From the Purchases & Payables window, Payment Journals: when choosing Suggest Vendor Payments from the Payments button, invoices and credit memos pull in; however, the credit memos are pulling in as refunds.

Cause  In the Options tab of the Suggest Vendor Payments window, the New Doc. No. per Line option is marked

Unmark the New Doc. No. per Line option before clicking OK.

Note: Place a check mark in this check box if you want the program to fill in the payment journal lines with consecutive document numbers, starting with the document number specified in the field above.