Count your inventory items and write the actual quantities on the physical inventory worksheet.

A) Counting your inventory items and writing the quantities on the physical inventory worksheet in QuickBooks 99, 2000, 2001, 2002, 2003, and 2004:

1. For users of QuickBooks 1999: From the Reports menu, choose Inventory Reports.

2. For users of QuickBooks 2000, 2001, 2002, 2003, and 2004: From the Reports menu, choose Inventory.

3. Choose Physical Inventory Worksheet.

4. Choose Print.

5. Choose Print to send the Physical Inventory Worksheet to the printer.

6. Count each inventory item in your store or warehouse and write the quantity in the Physical Count column of the worksheet.

Record the non-saleable items (fire, theft, damage, spoilage, and so on) on your profit and loss statement by adjusting the inventory item quantity on hand.

Adjusting your inventory shrinkage account due to fire, theft, damage, spoilage, and other events in QuickBooks 99, 2000, 2001, 2002, 2003, and 2004:

IMPORTANT: Before you make any inventory adjustments, verify you have entered all Vendor bills/checks and Customer invoices/sales receipts for the period. These accounts payable and accounts receivable activities ensure the correct item quantities are in QuickBooks inventory.

1. For users of QuickBooks 1999: From the Activities menu, choose Inventory.

2. For users of QuickBooks 2000, 2001, 2002, 2003, and 2004: From the Vendors menu, choose Inventory Activities.

3. Choose Adjust Quantity/Value on Hand.

4. Enter the Adjustment Date (for example, 3/31/04).

5. Enter a Ref. No. (if this is your first adjustment enter 1).

6. Tab to the Adjustment Account.

7. Enter the profit and loss account for your adjustments.

8. If you have never adjusted your inventory, type a name such as Inventory Shrinkage and press Tab.

9. Choose Set Up on the Account Not Found message.

10. 1. If you want the account Type to remain Expense, choose OK to create the account and close the New Account window. (Account Type of Expense will place your adjustment account below Gross Profit on your Profit & Loss Statement.)

    2. If you want to change the Type, click on the down arrow to display the list. Choose Cost of Goods Sold. (Account Type of Cost of Goods Sold will include your adjustment account in Total COGS — above Gross Profit on your Profit & Loss Statement.) Choose OK to close the New Account window.

    3. If you chose Cost of Goods Sold as the account, the "Income or Expense expected" message may display. Choose OK because you want your adjustment grouped with inventory that you have sold in Total COGS.

    
    

11. Press the Down Arrow to find the Item you need to change.

12. Choose a method to record your adjustments in step 13 or step 14 below.

13. If you recorded your items on the Physical Inventory Worksheet, enter the New Qty. For example:

    1. QuickBooks shows the Current Qty as 52.

    2. The physical count on the worksheet is 40.

    3. Enter 40 in the New Qty field.

    4. Press Tab and note the Qty Difference (that is, -12).

    
    

14. If you know the number of items that are no longer saleable, enter the Qty Difference as a negative number. For example, you have fruit jars in your inventory:

    1. QuickBooks shows the Current Qty as 52.

    2. You discover a broken box of fruit jars.

    3. Enter -12 in the Qty Difference field.

    4. Press Tab and note the Current Qty changes to 40.

    
    

15. The Total Value of Adjustment on the bottom of the screen for the item is the same for either method. For example, -6.00 displays for the fruit jars because they had a cost of .50.

16. Press the Down Arrow to find the next quantity you need to adjust.

17. Repeat steps 13 and/or 14 to enter all of your adjusted quantities.

18. After you have entered all quantity changes, note the Total Value of Adjustment for all Items.

19. Click in the Memo field or press the Down Arrow to move into the Memo field.

20. Type a Memo (for example, New quantities based on 3/31/04 physical inventory count or New quantities based on 3/15/04 breakage).

21. Close the Adjust Quantity/Value on Hand window.

    1. In QuickBooks 1999, choose OK.

    2. In QuickBooks 2000, 2001, 2002, 2003, and 2004, choose Save & Close.

    
    

Note for QuickBooks Premier 2003 and 2004: If you are using Inventory Assembly Item components, you may receive a Problem/Solution message. The message gives you the option to Mark Pending or Cancel. If you need to verify your Current Qty is correct, choose the Cancel button. If you want to mark the build pending, choose the Mark Pending button. If you are unsure, choose the Help button.