Hi Ramakanth,
In 2 way matching
when u match purchase order or reciept, during invoice
validation, it will check the 2 conditions
1. Quantity billed <= Quantity ordered
2. Invoice price <= Purchase order price
In 3-Way we will compare 3 documents
PO+reciept+Invoice
http://scn.sap.com/thread/1109011
Regards,
Sandeep kr.