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Inventory On-hand balance not matching with costing Balance for Perpetual Average Profile

Summary:

I have a scenario where Cost Profile is set with Perpetual Average, process negative quantity as per FIFO, please explain how it will process negative Cycle Count adjustment when there is no receipt layer. To explain in more details: I have a part number which initially has on hand balance of 2 created by a miscellaneous receipt. Later there are 3 negative cycle Count adjustments of negative 2. How does Costing depletes the cost layer? This customer initially used to allow inventory to have negative balance and later they disabled this. If the Inventory is set in a way not

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