diff --git a/erpnext/controllers/tests/test_accounts_controller.py b/erpnext/controllers/tests/test_accounts_controller.py
index fc4fb9fe9bf..415e1734a93 100644
--- a/erpnext/controllers/tests/test_accounts_controller.py
+++ b/erpnext/controllers/tests/test_accounts_controller.py
@@ -964,3 +964,19 @@ class TestAccountsController(unittest.TestCase):
 		si.reload()
 		self.assertEqual(si.outstanding_amount, 1)
 		self.assert_ledger_outstanding(si.doctype, si.name, 80.0, 1.0)
+
+		cr_note.reload()
+		cr_note.cancel()
+
+		# Exchange Gain/Loss Journal should've been created.
+		exc_je_for_si = self.get_journals_for(si.doctype, si.name)
+		exc_je_for_cr = self.get_journals_for(cr_note.doctype, cr_note.name)
+		self.assertNotEqual(exc_je_for_si, [])
+		self.assertEqual(len(exc_je_for_si), 1)
+		self.assertEqual(len(exc_je_for_cr), 0)
+
+		# The Credit Note JE is still active and is referencing the sales invoice
+		# So, outstanding stays the same
+		si.reload()
+		self.assertEqual(si.outstanding_amount, 1)
+		self.assert_ledger_outstanding(si.doctype, si.name, 80.0, 1.0)