Item posting - consumption

Hi,

In the Inventory posting set up, I can see from Sales order tab, there is a “Consumption” type setup for posting, and from Purchase order tab, there is also a “Consumption” type set up for posting. What does that really mean “Sales consumption” and “Purchase consumption”. Sales - issue and purchase - receipt is easy to understand.

Thanks,

Sales Order - Consumption - Cost of inventory is debited to general ledger when goods are invoiced. The packing slip postings are reversed. This is the cost of goods sold.

Purchase Order - Consumption - If you select Post financial inventory in theInventory model group, then the Variance on item returns is posted to general ledger when the return price varies from the inventory cost price If you do not select Post financial inventory in the Inventory model group, then the purchase price is debited to general ledger when the goods are invoiced. This is a debit to the purchase expense.