Hi Sir,
I was trying to setup Financial options in Payables , and could see "Inventory Org" field in "Supplier-Purchasing" Tab mandatory, but in your lecture that field does not look to be a mandatory one. However I tried defining the inventory organization through HRMS and tried to see if this will let me proceed with Financial option. The value in the field still does not show up "FRM-41830 List of values does not exist. I there anyway I bypass it or do I need to compulsorily take your lecture on creating inventory org and define and then try???

Looks like in your instance Purchasing application is marked as license that is why Payables is asking you to provide Inventory Organization.
Here are steps to create dummy inventory organization: http://handsonerp.com/images/fbfiles/files/creating_default_inventory_organization-4e92f3ff420df4debe5b82e2f33486f0.zip