Insufficient Quantity on Hand
If you have the preference to "Allow the Sale of Items with Insufficient On-hand Quantities" turned on Setup > Preferences > Inventory screen you can receive a message when attempting to create a sale that will take the inventory under zero and no cost for the item is set (never purchased and no standard cost).
Insufficient Quantity Message
The message you will receive is:
[Item] has an insufficient quantity on hand. Therefore, the cost needed to record the sale cannot be automatically calculated.
To enter an estimated cost, click the Item Information button and enter an amount in the Standard Cost field.
To use $0.00 as the estimated cost, click the Use $0.00 Cost button.
The cost entered in either of these ways will be automatically adjusted if, when you purchase the item, the actual purchase price is different from the cost on the sale. The difference will be recorded as an inventory adjustment.
What This Means for You
The above dialog is displayed in an alert box when you enter a sale for an item that has "I Buy This Item" selected in the items's Profile but the Standard Cost or Last Cost is not set.
The statement, "the cost...will be automatically adjusted" means a Cost of Sales cannot be determined at this time. It will be calculated after a purchase, if the "actual purchase price is different from the cost on the sale."