Post with Clearing F-04?

Dear Gurus,

Can anybody explain the purpose of F-04? why it is used for BADI?

If I select an indicator outgoing payment for vendor, then how to clear open items, shall I give posting keys for vendor outgoing posting?

Pls explaing the indicators in F-04

1. outgoing payment

2. Incomming payment

3. Credit Memo

4. Transfer with clearing?

Thanks

Anil