Hi Usman,
Both of your questions lies in setting up the settlement profile.
Plant Maintenance and Customer Service - Maintenance and Service Processing - Basic Settings - General Order Settlement - Maintain Settlement Profiles
Above is the sample settlement profile. We normally have different profiles for Refurbhishment and Normal order settlement. This is due to the default object type setting.
If the valid receivers is set as Settlement Optional, then you will have an option to enter additional settlement rule for refurbishment process.
Regards
Terence