Vendor refunds are handled in two different ways depending on the timing involved.
If you receive a refund check after you have already printed the check and sent it to your vendor . . .
Note: If you make the adjustment directly to the vendor, you will end up with a credit balance, which is not correct.
If you have entered the vendor bill into the system but have not yet printed the check and are informed that the amount of the bill has been reduced . . .