Why are credit memos posting to A/P?

Credit memos in CORE are used to issue project credits or refund retainers. Both are liabilities that credit A/P and these can be paid off from the Bill Payments screen. To reduce the amount on an invoice (affects A/R), you should use the 'credit' payment method. Check out these articles for details:

• Applying credit memos to invoices
• Issuing credit notes to clients