The closedQty flag informs that all quantities for given inventory item and inventory dimension set to zero. No item in stock, no item in process of receiving/shipping, also item is not expected to be sold/purchased/produced. The closed flag informs that the monetary balance for given item and inventory dimension is zero. Basically it means that all the costs related to given item was written-of from inventory account to COGS/WIP etc. Usually, the closed flag is set by inventory closing.
(But in simple cases it can be set immediately during posting of inventory issue).
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