PO Return and PO Debit/Credit Note Entry

1. Does PO return entry just return items back into inventory? Or does it also change the amount of the invoice by the amount that was returned.

2. Does PO debit/credit note entry add/subtract from the cost of inventory? or just from the A/P invoice?

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    1. PO return returns items FROM inventory, i.e. it reduces inventory.
    2. PO debit/credit note affects AP.
    Think of it this way: PO receipt affects inventory - PO return has the opposite affect. PO invoice affects AP - PO credit note has the opposite affect.