How to handle the Credit Memo and Payment in Payables

Hi Gurus,

Good afternoon. I have got the following scenerio

a. Purchase Order has been created for a given product

b. Product has been receipted in Inventory.

b. Purchase Order has been matched with the invoice in Payables.

c. Some products have been returned to the original supplier.

d. Now, the original supplier sent us a Credit Memo and a check.

Based on my understanding, I can match the CM against the original Purchase order line by line to get the credit or reduce the amount of the invoice. As a result, Purchasing module should make an adjusting entries to GL accounts to reduce by the same amount.