Valuation category & not allowed if material ledger active

What causes this issue?

On the one hand, the material ledger is active for the material and, on
the other, you have specified valuation category &V1&. This valuation
category causes the system to determine the valuation type
automatically in the case of goods receipt postings and to create a
valuation record if a record with the corresponding valuation type does
not exist for the material.
This combination is not allowed.

System Response

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

How to fix this error?

Correct your entry.

Error message extract from SAP system. Copyright SAP SE.