Only one person can book a room. If you get 3 INQUIRIES and pre-approve all of them, only the first one to RESERVE will get the room. You don't need to cancel anyone, they will see something that says it is no longer possible to book. And don't worry anything about payment, that is all handled by airbnb. They collect it and will pay it out to you after the guest arrives at your place.
If for some reason you really want the first person to stay, you could write them a note saying you have more guests waiting but generally hosts advice just taking whoever is the first one to actually send a RESRVATION request, not an INQUIRY.
Sometimes the similarity of meaning of those 2 words can be confusing.
Good luck!
Bridget