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Level 1

stock adjustment qty

dear sir or Madam, i have a quesiton about stock adjustment. 

  I will check my inventory regularly and find that the real inventory is less than what the QB balance sheet indicates. Maybe some inventories lost or someone forgot to record them properly in the system. So how can I adjust the inventory in the QB to make it is as same as the real amount?

i fiannly find "Inventory Quantity Adjustment" in Qb. 

i find that there are some items to choose in the "inventory adjustment account" ,including "change in inventory", "cost of sales", "inventory shrinkage", Other", etc. which one should I choose? "inventory shrinkage"?is there any other field or memos to record the real reasons?

if I choose "inventory shrinkage", how does it affect my balance sheet and income statement?


thanks a million


3 Comments 3

stock adjustment qty

Good day, golden2010.


I can help share some information about inventory adjustment in QuickBooks Online.


QuickBooks automatically creates the Inventory Shrinkage account when making inventory adjustments and uses this account to record all changes and adjustments. 


If you wish to use another account, I recommend reaching out to your accountant to guide you on a specific account to use. This ensures your books are updated.


To give you more insights about tracking inventories and the default accounts in QuickBooks Online, please visit these links:



I'll be right here to keep helping if you need more help with inventory management in QBO.

Level 1

stock adjustment qty

Select Suppliers and then Stock Activities. ...
Select Stock and then select Adjust Quantity/Value on Hand.
Select the Adjustment Type ▼ dropdown, then select Quantity, Total Value, or Quantity and Total Value. ...
Enter the Adjustment Date.

HP Instant Ink

Level 2

stock adjustment qty

  1. Determine the Type of Adjustment Needed:

    • Quantity Adjustment: Use this when you need to adjust the quantity on hand due to reasons other than sales or purchases (e.g., breakage, discrepancies after an inventory count).
    • Total Value Adjustment: Use this when you want to adjust the total value of your inventory (affected by factors like seasonal demand or spoilage).  value.
  2. Set Up an Inventory Adjustment Account:

    • Create a separate account in your chart of accounts to track adjustments. You can name it “Inventory Adjustments.”
    • To set up the account:
      • Go to Company and then Chart of Accounts.
      • Select the Account ▼ dropdown, then choose New.
      • From the Other Account Types ▼ dropdown, select Cost of Goods Sold.
      •  1.
  3. Adjust Your Inventory:

    • Navigate to Vendors and then Inventory Activities.
    • Select Adjust Quantity/Value on Hand.
    • Choose the appropriate adjustment type:
      • Quantity: Adjust the quantity only.
      • Total Value: Adjust both quantity and total value.
    • Specify the adjustment account you set up earlier.
    • Enter the adjustment date and any relevant reference number, customer, job, or class.
    • Select the items you want to adjust and input the new quantity or value.
  4. Impact on Financial Statements:

    • Balance Sheet:
      • Inventory Asset: The adjustment affects the inventory asset account. If you decrease inventory, the asset decreases; if you increase it, the asset increases.
      • Inventory Adjustments: The adjustment account (e.g., “Inventory Adjustments”) records the change.
    • Income Statement:
      • Cost of Goods Sold (COGS): When you adjust inventory, COGS is impacted. If you decrease inventory, COGS decreases; if you increase it, COGS increases.
      • Inventory Shrinkage: This account reflects the difference between the actual inventory and the recorded inventory.

Remember to consult with your accountant for specific guidance based on your business needs. Properly adjusting inventory ensures accurate financial reporting and helps maintain the integrity of your records


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