There are two(2) ways in which an order can be cancelled

1. Zero out the ordered quantity
2. Using the Demand field

This article shows you how to cancel an order using the Demand field

This process can also be used to;

1. Cancel lines on a sales order where you want to keep a history of what was originally ordered
2. Keep a track of what was originally order by the customer and what you could not supply where the customer does not want part supply

Select the order to be cancelled

In the Demand field enter in the quantity cancelled.  This will reset the B.Ord field to zero if the item was place on back order and the This.Del field to zero if the item was available