Cancelling Work Orders with costs associated to it

The following was reported by my Accounting Deaprtment. 

We have a WO that was cancelled in oracle. It had a receipt against it so there were costs incurred against it. If there are costs against a work order, it should not allow them to cancel it since the costs were already incurred. Because the WO is cancelled, we can’t back out the receipt against this PO that is not valid. There was a receipt and we ended up sending it back for credit. The item did not get returned in oracle before the WO was cancelled. Now we have a hung receipt that we cannot back out because