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Apply Entries
Go to the Vendor or Customer Ledger Entries.
Select the line to apply.
Click Actions, Functions, Apply Entries.

 

Select the line to apply to the line you had selected in our example.  We are applying a credit memo to an invoice.
Click Process, Set Applies-to Id.  This will enter your user id on the line you want to apply.
 

Click Process, Post Application.