The following GL Entry is created when an order is Shipped:
CR - Asset Account: Inventory
The amount for the journal entry is calculated by the Inventory Costing method (defined in the Entity Settings). Methods are either FIFO or average cost. If there are multiple line items shipped on the Sales Order, the above journal is created for each product.
Each product has a Category associated with it. The Category setup defines the (revenue and) expense accounts to be used when creating GL journal entries.
Each product has a Inventory GL Account associated with it.