If this option is selected for transaction reversals, a debit transaction is reversed by adding a minus debit transaction, ...

If this option is selected for transaction reversals, a debit transaction is reversed by adding a minus debit transaction, and a credit transaction is reversed by adding a minus credit transaction. When you reverse a customer or vendor transaction by using a correction, the connected ledger transactions are also reversed by using corrections. This is known as Storno reversal.
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