diff --git a/accounts/doctype/account/account.py b/accounts/doctype/account/account.py
index a6038ddd93..d3d467ffb4 100644
--- a/accounts/doctype/account/account.py
+++ b/accounts/doctype/account/account.py
@@ -98,9 +98,7 @@ class DocType:
 
 	# Check if any previous balance exists
 	def check_gle_exists(self):
-		exists = sql("""select name from `tabGL Entry` where account = %s
-			and ifnull(is_cancelled, 'No') = 'No'""", self.doc.name)
-		return exists and exists[0][0] or ''
+		return webnotes.conn.get_value("GL Entry", {"account": self.doc.name})
 
 	def check_if_child_exists(self):
 		return sql("""select name from `tabAccount` where parent_account = %s 
@@ -173,10 +171,6 @@ class DocType:
 		self.validate_trash()
 		self.update_nsm_model()
 
-		# delete all cancelled gl entry of this account
-		sql("""delete from `tabGL Entry` where account = %s and 
-			ifnull(is_cancelled, 'No') = 'Yes'""", self.doc.name)
-
 	def on_rename(self, new, old, merge=False):
 		company_abbr = webnotes.conn.get_value("Company", self.doc.company, "abbr")		
 		parts = new.split(" - ")	
diff --git a/accounts/doctype/account/test_account.py b/accounts/doctype/account/test_account.py
index 10b3f9294a..7c4f466472 100644
--- a/accounts/doctype/account/test_account.py
+++ b/accounts/doctype/account/test_account.py
@@ -19,6 +19,8 @@ def make_test_records(verbose):
 		["_Test Account Tax Assets", "Current Assets - _TC", "Group"],
 		["_Test Account VAT", "_Test Account Tax Assets - _TC", "Ledger"],
 		["_Test Account Service Tax", "_Test Account Tax Assets - _TC", "Ledger"],
+		
+		["_Test Account Reserves and Surplus", "Current Liabilities - _TC", "Ledger"],
 
 		["_Test Account Cost for Goods Sold", "Expenses - _TC", "Ledger"],
 		["_Test Account Excise Duty", "_Test Account Tax Assets - _TC", "Ledger"],
diff --git a/accounts/doctype/cost_center/cost_center.py b/accounts/doctype/cost_center/cost_center.py
index 6f977d775e..4b18aae4e8 100644
--- a/accounts/doctype/cost_center/cost_center.py
+++ b/accounts/doctype/cost_center/cost_center.py
@@ -46,8 +46,7 @@ class DocType(DocTypeNestedSet):
 			return 1
 
 	def check_gle_exists(self):
-		return webnotes.conn.sql("select name from `tabGL Entry` where cost_center = %s and \
-			ifnull(is_cancelled, 'No') = 'No'", (self.doc.name))
+		return webnotes.conn.get_value("GL Entry", {"cost_center": self.doc.name})
 		
 	def check_if_child_exists(self):
 		return webnotes.conn.sql("select name from `tabCost Center` where \
diff --git a/accounts/doctype/gl_entry/gl_entry.py b/accounts/doctype/gl_entry/gl_entry.py
index 1aad21f768..27199260f3 100644
--- a/accounts/doctype/gl_entry/gl_entry.py
+++ b/accounts/doctype/gl_entry/gl_entry.py
@@ -7,56 +7,53 @@ import webnotes
 from webnotes.utils import flt, fmt_money, getdate
 from webnotes.model.code import get_obj
 from webnotes import msgprint, _
-
-sql = webnotes.conn.sql
 	
 class DocType:
 	def __init__(self,d,dl):
 		self.doc, self.doclist = d, dl
 
-	def validate(self):	# not called on cancel
+	def validate(self):
 		self.check_mandatory()
 		self.pl_must_have_cost_center()
 		self.validate_posting_date()
-		self.doc.is_cancelled = 'No' # will be reset by GL Control if cancelled
 		self.check_credit_limit()
 		self.check_pl_account()
 
-	def on_update(self, adv_adj, cancel, update_outstanding = 'Yes'):
+	def on_update(self, adv_adj, update_outstanding = 'Yes'):
 		self.validate_account_details(adv_adj)
 		self.validate_cost_center()
-		self.check_freezing_date(adv_adj)
-		self.check_negative_balance(adv_adj)
+		validate_freezed_account(self.doc.account, adv_adj)
+		check_freezing_date(self.doc.posting_date, adv_adj)
+		check_negative_balance(self.doc.account, adv_adj)
 
 		# Update outstanding amt on against voucher
 		if self.doc.against_voucher and self.doc.against_voucher_type != "POS" \
 			and update_outstanding == 'Yes':
-				self.update_outstanding_amt()
+				update_outstanding_amt(self.doc.account, self.doc.against_voucher_type, 
+					self.doc.against_voucher)
 
 	def check_mandatory(self):
 		mandatory = ['account','remarks','voucher_type','voucher_no','fiscal_year','company']
 		for k in mandatory:
 			if not self.doc.fields.get(k):
-				msgprint(k + _(" is mandatory for GL Entry"), raise_exception=1)
+				webnotes.throw(k + _(" is mandatory for GL Entry"))
 
 		# Zero value transaction is not allowed
 		if not (flt(self.doc.debit) or flt(self.doc.credit)):
-			msgprint(_("GL Entry: Debit or Credit amount is mandatory for ") + self.doc.account, 
-				raise_exception=1)
+			webnotes.throw(_("GL Entry: Debit or Credit amount is mandatory for ") + 
+				self.doc.account)
 			
 	def pl_must_have_cost_center(self):
 		if webnotes.conn.get_value("Account", self.doc.account, "is_pl_account") == "Yes":
 			if not self.doc.cost_center and self.doc.voucher_type != 'Period Closing Voucher':
-				msgprint(_("Cost Center must be specified for PL Account: ") + self.doc.account, 
-					raise_exception=1)
-		else:
-			if self.doc.cost_center:
-				self.doc.cost_center = ""
+				webnotes.throw(_("Cost Center must be specified for PL Account: ") + 
+					self.doc.account)
+		elif self.doc.cost_center:
+			self.doc.cost_center = None
 		
 	def validate_posting_date(self):
 		from accounts.utils import validate_fiscal_year
 		validate_fiscal_year(self.doc.posting_date, self.doc.fiscal_year, "Posting Date")
-		
 
 	def check_credit_limit(self):
 		master_type, master_name = webnotes.conn.get_value("Account", 
@@ -65,8 +62,8 @@ class DocType:
 		tot_outstanding = 0	#needed when there is no GL Entry in the system for that acc head
 		if (self.doc.voucher_type=='Journal Voucher' or self.doc.voucher_type=='Sales Invoice') \
 				and (master_type =='Customer' and master_name):
-			dbcr = sql("""select sum(debit), sum(credit) from `tabGL Entry` 
-				where account = '%s' and is_cancelled='No'""" % self.doc.account)
+			dbcr = webnotes.conn.sql("""select sum(debit), sum(credit) from `tabGL Entry` 
+				where account = %s""", self.doc.account)
 			if dbcr:
 				tot_outstanding = flt(dbcr[0][0]) - flt(dbcr[0][1]) + \
 					flt(self.doc.debit) - flt(self.doc.credit)
@@ -76,30 +73,23 @@ class DocType:
 	def check_pl_account(self):
 		if self.doc.is_opening=='Yes' and \
 				webnotes.conn.get_value("Account", self.doc.account, "is_pl_account") == "Yes":
-			msgprint(_("For opening balance entry account can not be a PL account"), 
-				raise_exception=1)			
+			webnotes.throw(_("For opening balance entry account can not be a PL account"))			
 
 	def validate_account_details(self, adv_adj):
 		"""Account must be ledger, active and not freezed"""
 		
-		ret = sql("""select group_or_ledger, docstatus, freeze_account, company 
-			from tabAccount where name=%s""", self.doc.account, as_dict=1)
+		ret = webnotes.conn.sql("""select group_or_ledger, docstatus, company 
+			from tabAccount where name=%s""", self.doc.account, as_dict=1)[0]
 		
-		if ret and ret[0]["group_or_ledger"]=='Group':
-			msgprint(_("Account") + ": " + self.doc.account + _(" is not a ledger"), raise_exception=1)
+		if ret.group_or_ledger=='Group':
+			webnotes.throw(_("Account") + ": " + self.doc.account + _(" is not a ledger"))
 
-		if ret and ret[0]["docstatus"]==2:
-			msgprint(_("Account") + ": " + self.doc.account + _(" is not active"), raise_exception=1)
+		if ret.docstatus==2:
+			webnotes.throw(_("Account") + ": " + self.doc.account + _(" is not active"))
 			
-		# Account has been freezed for other users except account manager
-		if ret and ret[0]["freeze_account"]== 'Yes' and not adv_adj \
-				and not 'Accounts Manager' in webnotes.user.get_roles():
-			msgprint(_("Account") + ": " + self.doc.account + _(" has been freezed. \
-				Only Accounts Manager can do transaction against this account"), raise_exception=1)
-		
-		if self.doc.is_cancelled in ("No", None) and ret and ret[0]["company"] != self.doc.company:
-			msgprint(_("Account") + ": " + self.doc.account + _(" does not belong to the company") \
-				+ ": " + self.doc.company, raise_exception=1)
+		if ret.company != self.doc.company:
+			webnotes.throw(_("Account") + ": " + self.doc.account + 
+				_(" does not belong to the company") + ": " + self.doc.company)
 				
 	def validate_cost_center(self):
 		if not hasattr(self, "cost_center_company"):
@@ -107,70 +97,76 @@ class DocType:
 		
 		def _get_cost_center_company():
 			if not self.cost_center_company.get(self.doc.cost_center):
-				self.cost_center_company[self.doc.cost_center] = webnotes.conn.get_value("Cost Center",
-					self.doc.cost_center, "company")
+				self.cost_center_company[self.doc.cost_center] = webnotes.conn.get_value(
+					"Cost Center", self.doc.cost_center, "company")
 			
 			return self.cost_center_company[self.doc.cost_center]
 			
-		if self.doc.is_cancelled in ("No", None) and \
-			self.doc.cost_center and _get_cost_center_company() != self.doc.company:
-				msgprint(_("Cost Center") + ": " + self.doc.cost_center \
-					+ _(" does not belong to the company") + ": " + self.doc.company, raise_exception=True)
-		
-	def check_freezing_date(self, adv_adj):
-		"""
-			Nobody can do GL Entries where posting date is before freezing date 
-			except authorized person
-		"""
-		if not adv_adj:
-			acc_frozen_upto = webnotes.conn.get_value('Accounts Settings', None, 'acc_frozen_upto')
-			if acc_frozen_upto:
-				bde_auth_role = webnotes.conn.get_value( 'Accounts Settings', None,'bde_auth_role')
-				if getdate(self.doc.posting_date) <= getdate(acc_frozen_upto) \
-						and not bde_auth_role in webnotes.user.get_roles():
-					msgprint(_("You are not authorized to do/modify back dated entries before ") + 
-						getdate(acc_frozen_upto).strftime('%d-%m-%Y'), raise_exception=1)
+		if self.doc.cost_center and _get_cost_center_company() != self.doc.company:
+				webnotes.throw(_("Cost Center") + ": " + self.doc.cost_center + 
+					_(" does not belong to the company") + ": " + self.doc.company)
 						
-	def check_negative_balance(self, adv_adj):
-		if not adv_adj:
-			account = webnotes.conn.get_value("Account", self.doc.account, 
-					["allow_negative_balance", "debit_or_credit"], as_dict=True)
-			if not account["allow_negative_balance"]:
-				balance = webnotes.conn.sql("""select sum(debit) - sum(credit) from `tabGL Entry` 
-					where account = %s and ifnull(is_cancelled, 'No') = 'No'""", self.doc.account)
-				balance = account["debit_or_credit"] == "Debit" and \
-					flt(balance[0][0]) or -1*flt(balance[0][0])
-			
-				if flt(balance) < 0:
-					msgprint(_("Negative balance is not allowed for account ") + self.doc.account, 
-						raise_exception=1)
+def check_negative_balance(account, adv_adj=False):
+	if not adv_adj:
+		account_details = webnotes.conn.get_value("Account", account, 
+				["allow_negative_balance", "debit_or_credit"], as_dict=True)
+		if not account_details["allow_negative_balance"]:
+			balance = webnotes.conn.sql("""select sum(debit) - sum(credit) from `tabGL Entry` 
+				where account = %s""", account)
+			balance = account_details["debit_or_credit"] == "Debit" and \
+				flt(balance[0][0]) or -1*flt(balance[0][0])
+		
+			if flt(balance) < 0:
+				webnotes.throw(_("Negative balance is not allowed for account ") + self.doc.account)
 
-	def update_outstanding_amt(self):
-		# get final outstanding amt
-		bal = flt(sql("""select sum(debit) - sum(credit) from `tabGL Entry` 
-			where against_voucher=%s and against_voucher_type=%s and account = %s
-			and ifnull(is_cancelled,'No') = 'No'""", (self.doc.against_voucher, 
-			self.doc.against_voucher_type, self.doc.account))[0][0] or 0.0)
+def check_freezing_date(posting_date, adv_adj=False):
+	"""
+		Nobody can do GL Entries where posting date is before freezing date 
+		except authorized person
+	"""
+	if not adv_adj:
+		acc_frozen_upto = webnotes.conn.get_value('Accounts Settings', None, 'acc_frozen_upto')
+		if acc_frozen_upto:
+			bde_auth_role = webnotes.conn.get_value( 'Accounts Settings', None,'bde_auth_role')
+			if getdate(posting_date) <= getdate(acc_frozen_upto) \
+					and not bde_auth_role in webnotes.user.get_roles():
+				webnotes.throw(_("You are not authorized to do/modify back dated entries before ")
+					+ getdate(acc_frozen_upto).strftime('%d-%m-%Y'))
 
-		if self.doc.against_voucher_type == 'Purchase Invoice':
+def update_outstanding_amt(account, against_voucher_type, against_voucher, on_cancel=False):
+	# get final outstanding amt
+	bal = flt(webnotes.conn.sql("""select sum(debit) - sum(credit) from `tabGL Entry` 
+		where against_voucher_type=%s and against_voucher=%s and account = %s""", 
+		(against_voucher_type, against_voucher, account))[0][0] or 0.0)
+
+	if against_voucher_type == 'Purchase Invoice':
+		bal = -bal
+	elif against_voucher_type == "Journal Voucher":
+		against_voucher_amount = flt(webnotes.conn.sql("""select sum(debit) - sum(credit)
+			from `tabGL Entry` where voucher_type = 'Journal Voucher' and voucher_no = %s
+			and account = %s""", (against_voucher, account))[0][0])
+		
+		bal = against_voucher_amount + bal
+		if against_voucher_amount < 0:
 			bal = -bal
 		
-		elif self.doc.against_voucher_type == "Journal Voucher":
-			against_voucher_amount = flt(webnotes.conn.sql("""select sum(debit) - sum(credit)
-				from `tabGL Entry` where voucher_type = 'Journal Voucher' and voucher_no = %s
-				and account = %s""", (self.doc.against_voucher, self.doc.account))[0][0])
+	# Validation : Outstanding can not be negative
+	if bal < 0 and not on_cancel:
+		webnotes.throw(_("Outstanding for Voucher ") + gainst_voucher + _(" will become ") + 
+			fmt_money(bal) + _(". Outstanding cannot be less than zero. \
+			 	Please match exact outstanding."))
+		
+	# Update outstanding amt on against voucher
+	if against_voucher_type in ["Sales Invoice", "Purchase Invoice"]:
+		webnotes.conn.sql("update `tab%s` set outstanding_amount=%s where name='%s'" %
+		 	(against_voucher_type, bal, against_voucher))
 			
-			bal = against_voucher_amount + bal
-			if against_voucher_amount < 0:
-				bal = -bal
-			
-		# Validation : Outstanding can not be negative
-		if bal < 0 and self.doc.is_cancelled == 'No':
-			msgprint(_("Outstanding for Voucher ") + self.doc.against_voucher + 
-				_(" will become ") + fmt_money(bal) + _(". Outstanding cannot be less than zero. \
-				 	Please match exact outstanding."), raise_exception=1)
-			
-		# Update outstanding amt on against voucher
-		if self.doc.against_voucher_type in ["Sales Invoice", "Purchase Invoice"]:
-			sql("update `tab%s` set outstanding_amount=%s where name='%s'"%
-			 	(self.doc.against_voucher_type, bal, self.doc.against_voucher))
\ No newline at end of file
+def validate_freezed_account(account, adv_adj=False):
+	"""Account has been freezed for other users except account manager"""
+	
+	freezed_account = webnotes.conn.get_value("Account", account, "freeze_account")
+	
+	if freezed_account == 'Yes' and not adv_adj \
+		and 'Accounts Manager' not in webnotes.user.get_roles():
+			webnotes.throw(_("Account") + ": " + account + _(" has been freezed. \
+			Only Accounts Manager can do transaction against this account"))
\ No newline at end of file
diff --git a/accounts/doctype/journal_voucher/journal_voucher.py b/accounts/doctype/journal_voucher/journal_voucher.py
index 27b0518cf9..8c0c052a0c 100644
--- a/accounts/doctype/journal_voucher/journal_voucher.py
+++ b/accounts/doctype/journal_voucher/journal_voucher.py
@@ -49,7 +49,7 @@ class DocType(AccountsController):
 		from accounts.utils import remove_against_link_from_jv
 		remove_against_link_from_jv(self.doc.doctype, self.doc.name, "against_jv")
 		
-		self.make_gl_entries(cancel=1)
+		self.make_gl_entries()
 		
 	def on_trash(self):
 		pass
@@ -254,10 +254,10 @@ class DocType(AccountsController):
 						"against_voucher": d.against_voucher or d.against_invoice or d.against_jv,
 						"remarks": self.doc.remark,
 						"cost_center": d.cost_center
-					}, cancel)
+					})
 				)
 		if gl_map:
-			make_gl_entries(gl_map, cancel=cancel, adv_adj=adv_adj)
+			make_gl_entries(gl_map, cancel=self.doc.docstatus==2, adv_adj=adv_adj)
 
 	def get_outstanding(self, args):
 		args = eval(args)
diff --git a/accounts/doctype/payment_to_invoice_matching_tool/payment_to_invoice_matching_tool.py b/accounts/doctype/payment_to_invoice_matching_tool/payment_to_invoice_matching_tool.py
index dc2bcc585d..b91cc8be40 100644
--- a/accounts/doctype/payment_to_invoice_matching_tool/payment_to_invoice_matching_tool.py
+++ b/accounts/doctype/payment_to_invoice_matching_tool/payment_to_invoice_matching_tool.py
@@ -20,8 +20,7 @@ class DocType:
 		
 	def get_voucher_details(self):
 		total_amount = webnotes.conn.sql("""select %s from `tabGL Entry` 
-			where voucher_type = %s and voucher_no = %s 
-			and account = %s and ifnull(is_cancelled, 'No') = 'No'""" % 
+			where voucher_type = %s and voucher_no = %s and account = %s""" % 
 			(self.doc.account_type, '%s', '%s', '%s'), 
 			(self.doc.voucher_type, self.doc.voucher_no, self.doc.account))
 			
@@ -29,7 +28,7 @@ class DocType:
 		reconciled_payment = webnotes.conn.sql("""
 			select sum(ifnull(%s, 0)) - sum(ifnull(%s, 0)) from `tabGL Entry` where 
 			against_voucher = %s and voucher_no != %s
-			and account = %s and ifnull(is_cancelled, 'No') = 'No'""" % 
+			and account = %s""" % 
 			((self.doc.account_type == 'debit' and 'credit' or 'debit'), self.doc.account_type, 
 			 	'%s', '%s', '%s'), (self.doc.voucher_no, self.doc.voucher_no, self.doc.account))
 			
@@ -135,7 +134,6 @@ def gl_entry_details(doctype, txt, searchfield, start, page_len, filters):
 	    where gle.account = '%(acc)s' 
 	    	and gle.voucher_type = '%(dt)s'
 			and gle.voucher_no like '%(txt)s'  
-			and ifnull(gle.is_cancelled, 'No') = 'No'
 	    	and (ifnull(gle.against_voucher, '') = '' 
 	    		or ifnull(gle.against_voucher, '') = gle.voucher_no ) 
 			and ifnull(gle.%(account_type)s, 0) > 0 
@@ -143,8 +141,7 @@ def gl_entry_details(doctype, txt, searchfield, start, page_len, filters):
 				from `tabGL Entry` 
 	        	where against_voucher_type = '%(dt)s' 
 	        	and against_voucher = gle.voucher_no 
-	        	and voucher_no != gle.voucher_no 
-	        	and ifnull(is_cancelled, 'No') = 'No') 
+	        	and voucher_no != gle.voucher_no) 
 					!= abs(ifnull(gle.debit, 0) - ifnull(gle.credit, 0)
 			) 
 			%(mcond)s
diff --git a/accounts/doctype/sales_invoice/test_sales_invoice.py b/accounts/doctype/sales_invoice/test_sales_invoice.py
index a9546a4c35..3d7959afa5 100644
--- a/accounts/doctype/sales_invoice/test_sales_invoice.py
+++ b/accounts/doctype/sales_invoice/test_sales_invoice.py
@@ -325,12 +325,10 @@ class TestSalesInvoice(unittest.TestCase):
 		# cancel
 		si.cancel()
 		
-		gle_count = webnotes.conn.sql("""select count(name) from `tabGL Entry` 
-			where voucher_type='Sales Invoice' and voucher_no=%s 
-			and ifnull(is_cancelled, 'No') = 'Yes'
-			order by account asc""", si.doc.name)
+		gle = webnotes.conn.sql("""select * from `tabGL Entry` 
+			where voucher_type='Sales Invoice' and voucher_no=%s""", si.doc.name)
 		
-		self.assertEquals(gle_count[0][0], 8)
+		self.assertFalse(gle)
 		
 	def atest_pos_gl_entry_with_aii(self):
 		webnotes.conn.sql("delete from `tabStock Ledger Entry`")
@@ -387,12 +385,10 @@ class TestSalesInvoice(unittest.TestCase):
 		
 		# cancel
 		si.cancel()
-		gl_count = webnotes.conn.sql("""select count(name)
-			from `tabGL Entry` where voucher_type='Sales Invoice' and voucher_no=%s
-			and ifnull(is_cancelled, 'No') = 'Yes' 
-			order by account asc, name asc""", si.doc.name)
+		gle = webnotes.conn.sql("""select * from `tabGL Entry` 
+			where voucher_type='Sales Invoice' and voucher_no=%s""", si.doc.name)
 		
-		self.assertEquals(gl_count[0][0], 16)
+		self.assertFalse(gle)
 		
 		self.assertFalse(get_stock_and_account_difference([si.doclist[1].warehouse]))
 		
diff --git a/accounts/general_ledger.py b/accounts/general_ledger.py
index 8cfcfd9b7c..4b7e4256f3 100644
--- a/accounts/general_ledger.py
+++ b/accounts/general_ledger.py
@@ -8,14 +8,14 @@ from webnotes.model.doc import Document
 
 def make_gl_entries(gl_map, cancel=False, adv_adj=False, merge_entries=True, 
 		update_outstanding='Yes'):
-	if merge_entries:
-		gl_map = merge_similar_entries(gl_map)
-	
-	if cancel:
-		set_as_cancel(gl_map[0]["voucher_type"], gl_map[0]["voucher_no"])
+	if not cancel:
+		if merge_entries:
+			gl_map = merge_similar_entries(gl_map)
 
-	check_budget(gl_map, cancel)
-	save_entries(gl_map, cancel, adv_adj, update_outstanding)
+		check_budget(gl_map, cancel)
+		save_entries(gl_map, adv_adj, update_outstanding)
+	else:
+		delete_gl_entries(gl_map, adv_adj, update_outstanding)
 		
 def merge_similar_entries(gl_map):
 	merged_gl_map = []
@@ -52,7 +52,7 @@ def check_budget(gl_map, cancel):
 			if acc_details[0]=="Yes" and acc_details[1]=="Debit":
 				webnotes.get_obj('Budget Control').check_budget(gle, cancel)
 
-def save_entries(gl_map, cancel, adv_adj, update_outstanding):
+def save_entries(gl_map, adv_adj, update_outstanding):
 	total_debit = total_credit = 0.0
 	def _swap(gle):
 		gle.debit, gle.credit = abs(flt(gle.credit)), abs(flt(gle.debit))
@@ -68,36 +68,38 @@ def save_entries(gl_map, cancel, adv_adj, update_outstanding):
 		if flt(gle.debit) < 0 or flt(gle.credit) < 0:
 			_swap(gle)
 
-		# toggled debit/credit in two separate condition because 
-		# both should be executed at the 
-		# time of cancellation when there is negative amount (tax discount)
-		if cancel:
-			_swap(gle)
-
 		gle_obj = webnotes.get_obj(doc=gle)
-		# validate except on_cancel
-		if not cancel:
-			gle_obj.validate()
-
-		# save
+		gle_obj.validate()
 		gle.save(1)
-		gle_obj.on_update(adv_adj, cancel, update_outstanding)
+		gle_obj.on_update(adv_adj, update_outstanding)
 
 		# update total debit / credit
 		total_debit += flt(gle.debit)
 		total_credit += flt(gle.credit)
 				
-	if not cancel:
-		validate_total_debit_credit(total_debit, total_credit)
+	validate_total_debit_credit(total_debit, total_credit)
 	
 def validate_total_debit_credit(total_debit, total_credit):
 	if abs(total_debit - total_credit) > 0.005:
-		webnotes.msgprint("""Debit and Credit not equal for 
-			this voucher: Diff (Debit) is %s""" %
-		 	(total_debit - total_credit), raise_exception=1)
-
-def set_as_cancel(voucher_type, voucher_no):
-	webnotes.conn.sql("""update `tabGL Entry` set is_cancelled='Yes',
-		modified=%s, modified_by=%s
-		where voucher_type=%s and voucher_no=%s""", 
-		(now(), webnotes.session.user, voucher_type, voucher_no))
\ No newline at end of file
+		webnotes.throw(_("Debit and Credit not equal for this voucher: Diff (Debit) is ") +
+		 	cstr(total_debit - total_credit))
+		
+def delete_gl_entries(gl_entries, adv_adj, update_outstanding):
+	from accounts.doctype.gl_entry.gl_entry import check_negative_balance, \
+		check_freezing_date, update_outstanding_amt, validate_freezed_account
+	
+	check_freezing_date(gl_entries[0]["posting_date"], adv_adj)
+	
+	webnotes.conn.sql("""delete from `tabGL Entry` where voucher_type=%s and voucher_no=%s""", 
+		(gl_entries[0]["voucher_type"], gl_entries[0]["voucher_no"]))
+	
+	for entry in gl_entries:
+		validate_freezed_account(entry["account"], adv_adj)
+		check_negative_balance(entry["account"], adv_adj)
+		if entry.get("against_voucher") and entry.get("against_voucher_type") != "POS" \
+			and update_outstanding == 'Yes':
+				update_outstanding_amt(entry["account"], entry.get("against_voucher_type"), 
+					entry.get("against_voucher"))
+					
+	# To-do 
+	# Check and update budget for expense account
\ No newline at end of file
diff --git a/accounts/report/accounts_payable/accounts_payable.py b/accounts/report/accounts_payable/accounts_payable.py
index 20702fd0a2..d9a0ca2a4c 100644
--- a/accounts/report/accounts_payable/accounts_payable.py
+++ b/accounts/report/accounts_payable/accounts_payable.py
@@ -73,7 +73,7 @@ def get_gl_entries(filters, before_report_date=True):
 	conditions, supplier_accounts = get_conditions(filters, before_report_date)
 	gl_entries = []
 	gl_entries = webnotes.conn.sql("""select * from `tabGL Entry` 
-		where ifnull(is_cancelled, 'No') = 'No' %s order by posting_date, account""" % 
+		where docstatus < 2 %s order by posting_date, account""" % 
 		(conditions), tuple(supplier_accounts), as_dict=1)
 	return gl_entries
 	
@@ -126,7 +126,7 @@ def get_outstanding_amount(gle, report_date):
 		select sum(ifnull(debit, 0)) - sum(ifnull(credit, 0)) 
 		from `tabGL Entry` 
 		where account = %s and posting_date <= %s and against_voucher_type = %s 
-		and against_voucher = %s and name != %s and ifnull(is_cancelled, 'No') = 'No'""", 
+		and against_voucher = %s and name != %s""", 
 		(gle.account, report_date, gle.voucher_type, gle.voucher_no, gle.name))[0][0]
 		
 	outstanding_amount = flt(gle.credit) - flt(gle.debit) - flt(payment_amount)
diff --git a/accounts/report/accounts_receivable/accounts_receivable.py b/accounts/report/accounts_receivable/accounts_receivable.py
index 3ae222328c..86a2475359 100644
--- a/accounts/report/accounts_receivable/accounts_receivable.py
+++ b/accounts/report/accounts_receivable/accounts_receivable.py
@@ -65,7 +65,7 @@ def get_columns():
 def get_gl_entries(filters, upto_report_date=True):
 	conditions, customer_accounts = get_conditions(filters, upto_report_date)
 	return webnotes.conn.sql("""select * from `tabGL Entry` 
-		where ifnull(is_cancelled, 'No') = 'No' %s order by posting_date, account""" % 
+		where docstatus < 2 %s order by posting_date, account""" % 
 		(conditions), tuple(customer_accounts), as_dict=1)
 	
 def get_conditions(filters, upto_report_date=True):
@@ -116,7 +116,7 @@ def get_outstanding_amount(gle, report_date):
 		select sum(ifnull(credit, 0)) - sum(ifnull(debit, 0)) 
 		from `tabGL Entry` 
 		where account = %s and posting_date <= %s and against_voucher_type = %s 
-		and against_voucher = %s and name != %s and ifnull(is_cancelled, 'No') = 'No'""", 
+		and against_voucher = %s and name != %s""", 
 		(gle.account, report_date, gle.voucher_type, gle.voucher_no, gle.name))[0][0]
 		
 	return flt(gle.debit) - flt(gle.credit) - flt(payment_amount)
@@ -130,7 +130,7 @@ def get_payment_amount(gle, report_date, entries_after_report_date):
 		payment_amount = webnotes.conn.sql("""
 			select sum(ifnull(credit, 0)) - sum(ifnull(debit, 0)) from `tabGL Entry` 
 			where account = %s and posting_date <= %s and against_voucher_type = %s 
-			and against_voucher = %s and name != %s and ifnull(is_cancelled, 'No') = 'No'""", 
+			and against_voucher = %s and name != %s""", 
 			(gle.account, report_date, gle.voucher_type, gle.voucher_no, gle.name))[0][0]
 	
 	return flt(payment_amount)
diff --git a/accounts/report/budget_variance_report/budget_variance_report.py b/accounts/report/budget_variance_report/budget_variance_report.py
index 015e2c01b3..ee4f6fe20a 100644
--- a/accounts/report/budget_variance_report/budget_variance_report.py
+++ b/accounts/report/budget_variance_report/budget_variance_report.py
@@ -87,7 +87,7 @@ def get_actual_details(filters):
 	return webnotes.conn.sql("""select gl.account, gl.debit, gl.credit, 
 		gl.cost_center, MONTHNAME(gl.posting_date) as month_name 
 		from `tabGL Entry` gl, `tabBudget Detail` bd 
-		where gl.fiscal_year=%s and company=%s and	is_cancelled='No' 
+		where gl.fiscal_year=%s and company=%s
 		and bd.account=gl.account""" % ('%s', '%s'), 
 		(filters.get("fiscal_year"), filters.get("company")), as_dict=1)
 
diff --git a/accounts/report/gross_profit/gross_profit.py b/accounts/report/gross_profit/gross_profit.py
index 3aba234c19..ccc34b51da 100644
--- a/accounts/report/gross_profit/gross_profit.py
+++ b/accounts/report/gross_profit/gross_profit.py
@@ -48,7 +48,7 @@ def get_stock_ledger_entries(filters):
 		voucher_detail_no, posting_date, posting_time, stock_value,
 		warehouse, actual_qty as qty
 		from `tabStock Ledger Entry`
-		where ifnull(`is_cancelled`, "No") = "No" """
+		where ifnull(`is_cancelled`, 'No') = No'"""
 	
 	if filters.get("company"):
 		query += """ and company=%(company)s"""
diff --git a/accounts/utils.py b/accounts/utils.py
index e49d4b1d34..bb1e5d9b6b 100644
--- a/accounts/utils.py
+++ b/accounts/utils.py
@@ -91,15 +91,10 @@ def get_balance_on(account=None, date=None):
 	else:
 		cond.append("""gle.account = "%s" """ % (account, ))
 	
-	# join conditional conditions
-	cond = " and ".join(cond)
-	if cond:
-		cond += " and "
-	
 	bal = webnotes.conn.sql("""
 		SELECT sum(ifnull(debit, 0)) - sum(ifnull(credit, 0)) 
 		FROM `tabGL Entry` gle
-		WHERE %s ifnull(is_cancelled, 'No') = 'No' """ % (cond, ))[0][0]
+		WHERE %s""" % " and ".join(cond))[0][0]
 
 	# if credit account, it should calculate credit - debit
 	if bal and acc.debit_or_credit == 'Credit':
@@ -236,8 +231,7 @@ def remove_against_link_from_jv(ref_type, ref_no, against_field):
 		set against_voucher_type=null, against_voucher=null,
 		modified=%s, modified_by=%s
 		where against_voucher_type=%s and against_voucher=%s
-		and voucher_no != ifnull(against_voucher, "")
-		and ifnull(is_cancelled, "No")="No" """,
+		and voucher_no != ifnull(against_voucher, '')""",
 		(now(), webnotes.session.user, ref_type, ref_no))
 
 @webnotes.whitelist()
diff --git a/controllers/accounts_controller.py b/controllers/accounts_controller.py
index bbad9600ed..4b63f3f65e 100644
--- a/controllers/accounts_controller.py
+++ b/controllers/accounts_controller.py
@@ -330,11 +330,8 @@ class AccountsController(TransactionBase):
 			
 			self.calculate_outstanding_amount()
 
-	def get_gl_dict(self, args, cancel=None):
+	def get_gl_dict(self, args):
 		"""this method populates the common properties of a gl entry record"""
-		if cancel is None:
-			cancel = (self.doc.docstatus == 2)
-			
 		gl_dict = {
 			'company': self.doc.company, 
 			'posting_date': self.doc.posting_date,
@@ -342,7 +339,6 @@ class AccountsController(TransactionBase):
 			'voucher_no': self.doc.name,
 			'aging_date': self.doc.fields.get("aging_date") or self.doc.posting_date,
 			'remarks': self.doc.remarks,
-			'is_cancelled': cancel and "Yes" or "No",
 			'fiscal_year': self.doc.fiscal_year,
 			'debit': 0,
 			'credit': 0,
diff --git a/controllers/stock_controller.py b/controllers/stock_controller.py
index 0ed2e2e0b2..6439ade30d 100644
--- a/controllers/stock_controller.py
+++ b/controllers/stock_controller.py
@@ -23,7 +23,7 @@ class StockController(AccountsController):
 					"against": against_stock_account,
 					"debit": amount,
 					"remarks": self.doc.remarks or "Accounting Entry for Stock",
-				}, self.doc.docstatus == 2),
+				}),
 				
 				# account against stock in hand
 				self.get_gl_dict({
@@ -32,7 +32,7 @@ class StockController(AccountsController):
 					"credit": amount,
 					"cost_center": cost_center or None,
 					"remarks": self.doc.remarks or "Accounting Entry for Stock",
-				}, self.doc.docstatus == 2),
+				}),
 			]
 			
 			return gl_entries
diff --git a/selling/doctype/sales_common/sales_common.py b/selling/doctype/sales_common/sales_common.py
index 84f956ec7a..9aac506916 100644
--- a/selling/doctype/sales_common/sales_common.py
+++ b/selling/doctype/sales_common/sales_common.py
@@ -311,7 +311,8 @@ class DocType(TransactionBase):
 		acc_head = webnotes.conn.sql("select name from `tabAccount` where company = '%s' and master_name = '%s'"%(obj.doc.company, obj.doc.customer))
 		if acc_head:
 			tot_outstanding = 0
-			dbcr = webnotes.conn.sql("select sum(debit), sum(credit) from `tabGL Entry` where account = '%s' and ifnull(is_cancelled, 'No')='No'" % acc_head[0][0])
+			dbcr = webnotes.conn.sql("""select sum(debit), sum(credit) from `tabGL Entry` 
+				where account = %s""", acc_head[0][0])
 			if dbcr:
 				tot_outstanding = flt(dbcr[0][0])-flt(dbcr[0][1])
 
diff --git a/setup/doctype/company/company.py b/setup/doctype/company/company.py
index 7a1d03734d..ea320ed218 100644
--- a/setup/doctype/company/company.py
+++ b/setup/doctype/company/company.py
@@ -287,7 +287,7 @@ class DocType:
 		"""
 			Trash accounts and cost centers for this company if no gl entry exists
 		"""
-		rec = webnotes.conn.sql("SELECT name from `tabGL Entry` where ifnull(is_cancelled, 'No') = 'No' and company = %s", self.doc.name)
+		rec = webnotes.conn.sql("SELECT name from `tabGL Entry` where company = %s", self.doc.name)
 		if not rec:
 			# delete gl entry
 			webnotes.conn.sql("delete from `tabGL Entry` where company = %s", self.doc.name)
diff --git a/setup/doctype/email_digest/email_digest.py b/setup/doctype/email_digest/email_digest.py
index 39e377a601..07efd16ec8 100644
--- a/setup/doctype/email_digest/email_digest.py
+++ b/setup/doctype/email_digest/email_digest.py
@@ -362,8 +362,8 @@ class DocType(DocListController):
 		gl_entries = webnotes.conn.sql("""select `account`, 
 			ifnull(credit, 0) as credit, ifnull(debit, 0) as debit, `against`
 			from `tabGL Entry`
-			where company=%s and ifnull(is_cancelled, "No")="No" and
-			posting_date <= %s %s""" % ("%s", "%s", 
+			where company=%s 
+			and posting_date <= %s %s""" % ("%s", "%s", 
 			from_date and "and posting_date>='%s'" % from_date or ""),
 			(self.doc.company, to_date or self.to_date), as_dict=1)
 		
diff --git a/startup/report_data_map.py b/startup/report_data_map.py
index e619619c3f..54453f68bb 100644
--- a/startup/report_data_map.py
+++ b/startup/report_data_map.py
@@ -36,7 +36,6 @@ data_map = {
 	"GL Entry": {
 		"columns": ["name", "account", "posting_date", "cost_center", "debit", "credit", 
 			"is_opening", "company", "voucher_type", "voucher_no", "remarks"],
-		"conditions": ["ifnull(is_cancelled, 'No')='No'"],
 		"order_by": "posting_date, account",
 		"links": {
 			"account": ["Account", "name"],