AP Refund going to write-off account!

When we make refund to a credit memo, it is reversing the liability and accounting to write-off. This is causing a difference in the AP Trial Balance Report and incorrect accounting. Can someone advise why is this happening? is this a bug or is there any solution to resolve it.

Credit Memo    Dr Liability        1,660.71   
Credit Memo    Cr Charge        307.48
Credit Memo    Cr Charge        1,353.23
           
Refund    Cr Liability               1,660.71
Refund    Dr Liability                1,660.71   
Refund    Cr Write Off             1,660.71
Refund    Dr Cash Clearing      1,660.71   
Refund    Cr Cash Clearing      1,660.71
Refund    Dr Cash                    1,660.71

Regards,

Prashanth