I cannot locate a credit note for knock off

In QuickBooks Online, you need to issue a Refund receipt to pay out the money and then link them together so QuickBooks knows the balance has been resolved.

Here’s how:
 

1. Click the + Create button in the top left corner.
2. Under the Customers column, select Refund receipt.
3. Select the Customer from the dropdown.
4. In the Refund From dropdown, choose the bank account you are paying the money out of.
5. In the Product/Service section, select the same item/service that was used on the original Credit note.
6. Enter the exact Amount to be paid back.
7. Click Save.

QBO treats a note and a Refund as two different items. You need to offset them against each other to stop the credit note from appearing as open.

1. Click the +Create button again.
2. Select Receive Payment.
3. Choose the same Customer.
4. In the Outstanding Transactions section, you must select an invoice before adding a credit.
5. In the Credits section, you will see the original Credit note. Check the box next to it.
6. The Amount received at the top should now say S$0.00 because the credit and the refund cancel each other out.
7. Click Save and close.

Please let me know if this successfully clears the open balance for you, or if you need help with any other bookkeeping adjustments. I'm here to help.