"Canceled" is correct if you are in the US; "Cencelled" is correct elsewhere.
"Cancel" is a case of Americanism where the original doubled -ll has be shortened to the single -l. When forming the past, particles or the gerund, the double -ll mysteriously reappears, which is an inconsistency as the second syllable "-cel" is not stressed, and the doubling of consonant rule should not apply.
Hence it is acceptable to write "canceled" in US English while the base form "cancell" is used consistently elsewhere in the Anglosphere.
"cancel
• verb (cancelled, cancelling; US also canceled, canceling) 1 decide that (a planned event) will not take place. 2 annul or revoke. 3 (cancel out) neutralize or negate the effect of. 4 mark (a stamp, ticket, etc.) to show that it has been used and is no longer valid.
— DERIVATIVES cancellation noun canceller noun.
— ORIGIN Latin cancellare, from cancelli ‘crossbars’."
http://www.askoxford.com/concise_oed/cancel?view=uk
"Verb
Infinitive = to cancel
Third person singular = cancels
Simple past = cancelled (Commonwealth), canceled (American)
Past participle = cancelled (Commonwealth), canceled (American)
Present participle = cancelling (Commonwealth), canceling (American)
to cancel :
third-person singular simple present = cancels,
present participle = cancelling (Commonwealth),
present participle = canceling (American),
simple past & past participle = cancelled (Commonwealth),
simple past & past participle = canceled (American)"
http://en.wiktionary.org/wiki/cancel