A credit memo is a transaction that decreases the amount a customer owes you.
A credit memo created from a return authorization has no impact on inventory. The inventory adjustment had already been adjusted before the credit memo was created.
If the inventory quantity was already adjusted due to the return authorization, the credit memo would not impact the inventory quantity, but it appears as a negative figure in the related record details.
In the case of a standalone credit memo, it has an impact on inventory.
To use credit memos, you must maintain customer balances using the A/R (Accounts Receivable) feature. An administrator can enable this feature at Setup > Company > Setup Tasks > Enable Features.
To enter a credit memo, go to Transactions > Customers > Issue Credit Memos.