Hi Neha,
in SAP Project/WBS is temporary cost collector and need to settle to another object for closing that object.
as far as settlement, for Customer Projects you need to check Profitability and RA so you need to settle all cost to PSG, in Internal projects like Asset scenario you have settle that cost to AUC and then Fixed Asset so depreciation will be executed wrt use of that Asset.
Every scenario of SAP PS need to settle to close that project so its a primary requirement to close any project that WBS should not contain any actual cost or Pending commitment.
all settlement is depends on scenario you are working on.
hope you understand 
thanks
Sunil