hello Marilyn - this is a Standard SAP B1 Function where you can right click on a document (AR Invoice or Sales Order) and Close or Cancel it...or you can go to the Command Line at the top of SAP B1 > Select Data > Select Close or Cancel when you have the document open.
Now the most important point - you can Cancel or Close a document - the difference is (using some examples)...
CLOSE means you do not want to work with it anymore and it has no financial or inventory impact. A good example is maybe you have a Sales Order with four lines and you have already shipped lines 2 and 3. The Customer calls and says not to ship the other lines of 1 and 4. Then you can just close the Sales Order.
CANCEL means you want to reverse the financial and/or inventory impact you had when you first created the document. So, Cancel actually creates a reversing Journal Entry of what was on the AR Invoice you previously created. A good example is you shipped a sample product to the Customer and they return that item to you. But the Customer does not want an AR Credit Memo and you want to put the item back into the warehouse. So you cancel that AR Invoice and SAP B1 puts the sample product back into your warehouse, the Business Partner balance is automaticallly reduced to zero, and the financial impact is that appropriate GL Accounts are updated (Revenue, COGS, etc). this example, of course, is dependent upon how you created the AR Invoice (stand alone versus Copy from Delivery, etc.).
I would suggest you go into your Test System, create two AR Invoices with Items on them. Close one AR Invoice and Cancel the other AR Invoice. Then take a look at all of the impact these four items have on GL, Inventory, BP Partner etc. No better way to learn than to test it out!!!
PS - REMOVE is another way you can delete information (Sales Order Lines, Business Partners, Item Master, etc. Might be a good time to try that one out in your Test System also).
Thanks for the very descriptive answer. However, if you switch the document (say Purchase Order) to Find mode then click on the drop down arrow of the Status, you will see the following lists as:
2. Open - printed
3. Closed (as you explained, thanks)
4. Cancelled (as you explained, thanks)
8. Closed - Cancellation - 'this is what I am referring to'