Hi Erwin,
There is no Approval for the Incoming Payment.
There are two steps in reversing the check which got returned...
1. Cancel the Deposit. Before your select cancel on the deposit make sure the Posting Period of the original deposit is the same as current. If the deposit was made in the previous month then you need to change the posting period.
2. Then Open the Incoming Payment associated with this and cancel the Incoming Payment.
Cheers!