Difference between "Apply" and "Prepayment on Invoice"

HI Friends,

I need to understand the usage of "Prepayment on Invoice", the details are as below :

Navigation : Invoice Workbench > Invoice> Actions>

Then Apply/Unapply prepayments screen appears, Now when i click ONLY on "Apply" , The prepayment gets applied but however when i select BOTH ( Apply and Prepayment on Invoice ) , then prepayment gets applies on Line level but not on Header level , hence the amount at header level and Line level gets mismatch and HOLD gets applied

Can anyone please let me know the usage of "Prepayment on Invoice " check box.

Thanks

Regards,

Yogesh