If you cancel a fee for a lost item, that item will create a credit when it is returned. To recreate: 1. Ensure WhenLostChargeReplacementFee is set to "Charge" and that "Refund lost item replacement fee" in circ rules is set to "refund lost item charge". 2. Check out an item that has a replacement cost. 3. Set the item to lost. 4. Go to the Accounting tab and view Transactions. 5. Cancel the charge. 6. Return the item. Note that the patron now has a credit. This does not appear to be the case when a fine is written off. I also question whether canceling a fee should mark and item as Paid as I've always viewed "Cancel charge" as an "oops" button when someone accidentally makes something lost, so it probably shouldn't set the item to paid. But that might be outside of the scope of this ticket.