Hamnaabeer, Looks like your post was missed to be anwered. Sorry about that.

This topic has been discovered various times.
Here is the solution:

Looks like in your instance Purchasing application is marked as license that is why Payables is asking you to provide Inventory Organization. This field becomes mandatory if Purchasing is marked as installed otherwise this field is optional. I hope you are not using Vision instance cause you will experience more issues down the line. Fresh installed is preferred for the best learning of how to setup from scratch.
Now you have two choices. You can quick create a dummy inventory organization and attach to this field. The steps are shown in the attached document.
You can go through the starting videos of Purchasing and create a proper inventory organization.
You can go with option 1 to keep things simple. That way will first learn Payables functionality before going into Purchasing.
Here are steps to create dummy inventory organization: http://handsonerp.com/images/fbfiles/files/creating_default_inventory_organization-4e92f3ff420df4debe5b82e2f33486f0.zip