The invoice goes to AP, and that's what is paid.  If the invoice is different than the receipt, an adjustment is made to inventory for the difference.

thank you Jay. Won't the invoice be placed on hold since the receipts are different (lesser) than the invoiced quantity? Also, how would it work when the PO is for services? How would it work if the inventory module is not used by the organization?

1. It won't be placed hold

2. Same for services

3. The difference will go to another account besides inventory, probably a clearing account

thank you Jay. this helps

thank you Jay. this helps