What is the meaning of Document Types?

Document Type:
This serves as a differentiating factor for the Business transactions. This helps in identifying the particular business transaction.
Document types are defined at the Client level. They control the header data and define the following: 1.Document Number Range, 2.Account Type, 3.Document Header Text, 4.Reference
If the document is an Invoice, it also defines whether it has been posted with net procedure.

Doc Type controls the doc header & is used to classify the business transactions to be posted, it is the key to
Differentiate and classify business transactions.
Most imp control functions of doc types are ;
i. Number ranges for doc numbers;
ii. Account types permitted for postings
Doc Types defined at client level and valid for all coy codes. It controls the following:
i. which accounts to be posted
ii. number range
iii. field status of document header text and reference
iv. Whether invoices are posted with net procedure.

Document type specifies what type of document it is i.e., Inquiry,
Quotation, Order, Contract etc.

we use documents based on transaction. if you want to send a quotation to a
customer , then you will use Quotation Document . sameway you use for
order, contract and all relevant documents to process the transaction.