Once you cancel a transaction, you have an option to reverse the journal entry that was created upon making a transaction.
This helps to "undo" the journal entry and simplify record keeping.
Enabling the Reverse Journal
To enable the reverse journal feature,
- Go to Navigation Panel > Company Setup > Default Settings.
- Head to System Preferences.
Click the View icon and select Yes.
Cancelling a Transaction
Once reverse journal was enabled, a checkbox will be shown on the confirmation modal upon cancelling a transaction.
- Mark the checkbox and input the Cancellation Date.
To check if the reverse journal entry was created,
Head to Accounting > Transaction Journals.