Costing methods usually differ in the way that they value inventory decreases. But, regardless of what costing type you use, all of them have minimum one common thing. When the quantity on inventory is zero, the inventory value must also be zero. The next common thing is way of the posting all incoming and outgoing entries. This posting results entries as quantity and as value. Quantity posting describes the change in quantity on inventory and this transaction is stored in Item Ledger Entries. Value posting describes the change in inventory value and this transaction is stored in Value Entries. Each entry in Value Entries table is linked with entry in the Item Ledger Entries table. More entries in the Value Entries table can be applied with the same entry in the Item Ledger Entry.
Each Item ledger entry is applied against each other. All these applications between incoming and outgoing quantities in the Item Ledger Entries are stored in the Item Application Entry table as links between inventory increase and inventory decrease in an Item Ledger Entry. NAV records the entry number of the Item Ledger Entry corresponding to the inventory increase in the Inbound Item Entry No. field and the entry number of the Item Ledger Entry corresponding to the inventory decrease in the Outbound Item Entry No. field. The program also reduces the Remaining Quantity fields in the corresponding item ledger entries by the applied quantity.
Based on the Inventory Posting Setup, system will post all these entries to the General Ledger Entries.