Every supplier return you ship back shows in Stockroom's reports as stock leaving and credit coming back, kept apart from what you bought. How to make a return is in Return stock to a supplier.
Reports that show returns
Vendor purchase history - Returns, Credit and Net columns beside Spend. A return never quietly shrinks what you spent with a supplier: you see both numbers and the net.
Receipts - a Direction column separates received lines from returned ones, and returned units and value are split out of the totals rather than blended in.
Inventory roll-forward - a Returned column between Adjusted and COGS, so the tie-out still reads left to right: opening + received + restocked + adjusted - returned - COGS = ending.
Inventory movements - every ship-back as its own row, filterable to the Return to supplier type. On a product's History, each one carries a Returned badge.
Cost of goods
A return takes stock out at the cost it came in at and books no cost of goods sold, because nothing was sold - your COGS and margin figures are untouched. See The COGS report: FIFO and weighted average costing.
Good to know
A ship-back recorded with Stock already removed - don't adjust inventory is left out of the stock movement reports and the cost of goods walk, because the adjustment that took the items out already counted them. The product's inventory history shows it with 0 and stock already removed.