Cycle Count and Physical Inventory
Use cycle counting and physical inventory to correct inventory on-hand balances. A cycle count updates the accounts of the affected subinventory and offsets the adjustment account you specify. If you physically count more than your on-hand balance, the accounting entries are:
| Subinventory accounts @ standard cost
| XX
|
|
| Adjustment account @ standard cost
|
| XX
|
If you count less than your on-hand balance, the accounting entries are:
| Adjustment account @ standard cost
| XX
|
|
| Subinventory accounts @ standard cost
|
| XX
|
Like a cycle count, a physical inventory adjustment also updates the accounts of the affected subinventories and the physical inventory adjustment account you specify.
Suggestion: Since the standard cost is not stored as you freeze the physical quantities, you should not perform a standard cost update until you have adjusted your physical inventory.
Expense Subinventories and Expense Items
The system does not record accounting entries for expense subinventories or expense items for either physical inventory or cycle count adjustments. However, the on-hand balance of an expense subinventory is corrected if you track the quantities.
See Also
Overview of Cycle Counting
Entering Cycle Counts
Overview of Physical Inventory
Processing Physical Inventory Adjustments
Updating Pending Costs to Frozen Standard Costs
