If you need to do a basic credit to a customer and return inventory then you can do that as a negative sales order line in AX. There is a button on the sales line called credit note that helps you find the original order to credit. This is a quick walk through of that process.
An alternative way to do this is via a return order which you can see an overview on this post.
Is there a parameter that will also display the credit note (i.e. the negative transactions) in the credi note selection window? AX 2009 allows them to be visible but not AX 2012.
I don’t believe there is a parameter in AX2012 for that. What is the reason for needing it? Is it so you can try to see if something as already been credited?