No history of projects invoice and subsequent credit in cash application screen and reports

We created a projects billing invoice against a prepaid account.  It is not set up for automatic cash application.  A few weeks later we created an offsetting credit memo from projects.  When we went to the cash application screen to net them, neither were in the LOV.  Also, running the Applied and Unapplied receipt registers do not show the invoice or credit memo.  Is this standard functionality?  We seemed to have lost a critical audit trail here.