Inventory adjustment
In one sentenceAn entry and change to the book inventory balance to match the actual quantity after a count, or to record damage or loss, after approval by the person responsible.
Simply put
After a count you may find the balance in the system is not what is on the shelf. The adjustment corrects the books to match reality: a shortage is recorded as an expense, and a surplus as a reduction in cost.
Do not adjust before looking for the cause: an unrecorded document, a unit-of-measure error, or a real loss.
Worked example
A store's balance of an item in the system is 500 boxes, after the count 488 boxes were found, and each box costs 15 SAR.
Shortage500 − 488 = 12 boxes
Value of the shortage12 × 15 = 180 SAR
Dr Inventory shortage180
Cr Inventory180
Adjustment amount180 SAR shortage
Don't confuse it with
Inventory count varianceDifferences are what the count reveals, while the adjustment is the entry that deals with them in the books.
in FullScreen ERP
The system allows a full or partial count with the adjustment entries created automatically. Warehouses and items