Product returns and issuing credits

[Charley Tiggs <..hidden..>]

I just want to double check that I'm doing this correctly.

When a customer returns an item, the correct way to issue a credit 
within LSMB is to create an invoice with negative values, correct?  The 
qty will be negative, therefore, the charge will be negative.  Since the 
quantity is negative on the invoice, it should return this item back to 
inventory.  Is there another preferred method of handling this?

This has raised a question about product returns and warranty work.  All 
that is happening in this instance is that the item is being received 
and will either be replaced with the correct item or repaired and sent 
back out.  The client would like a record of this having been done 
withing LSMB.  In the case of replacements, would it be the case that I 
create one invoice to receive the item so is to put the old item back 
into inventory and a second sales order and invoice to send the new item 
of the same cost out (without charging the customer twice)?  For 
warranty repairs, since the same item will usually be shipped back to 
the customer, is there a suggested way to manage this within LSMB?

Charley