A credit note cancels a whole or part of an invoice, either because the invoice itself was incorrect or there was a problem with the goods/services that were being invoiced for.
Credit notes are frequently printed in red to distinguish them from normal invoices.
They normally contain similar information to that contained on the original invoice, plus the invoice number to which it relates.
The Happy Accountant 
So, if we want to record a refund for goods returned by customers… Double entry is e.g.?
Dr Credit Note
Cr Receivables
to cancel, and then ?
Dr Receivables
Cr Sales
Double entry would effectively be the reverse of the sale entry.
If it was a credit sale:
Cr Debtors Account (for the appropriate customer)
Dr Sales Account