> ## Documentation Index
> Fetch the complete documentation index at: https://www.adorabl.info/llms.txt
> Use this file to discover all available pages before exploring further.

# Adjustment reasons

> Map inventory adjustment reasons to the GL accounts they post against.

Every inventory adjustment carries a **reason** — why the quantity changed. Each reason maps to an offset account so that posting an adjustment also posts a balanced journal entry. Map the reasons before your team posts its first adjustment.

## Open adjustment reasons

**1. Navigate**

1. Open **Settings** → **Inventory**.
2. Click **Adjustment reasons**.

## Seeded reasons

adorabl seeds a standard list for every organization:

| Reason | Typical use |
| - | - |
| **Damage** | Units broken or unsellable |
| **Theft** | Missing units attributed to loss |
| **Cycle count** | Count corrections up or down |
| **Found** | Stock located that was not on the books |
| **Promo / Sample** | Units given away or used for marketing |
| **Write-off** | Obsolete or expired stock removed from inventory |

## Map each reason to an account

**1. Choose the offset account**

For each reason, pick the **Expense** (or cost of goods sold) account that should absorb the adjustment. Most organizations map shrink reasons to a shrinkage or COGS account and **Found** to the same account so corrections net out.

**2. Save**

Click **Save**. The reason list is available immediately on the inventory transaction line grid.

## How adjustments post

| Direction | Journal entry |
| - | - |
| **Decrease** (negative quantity) | Debit the reason's offset account, credit Inventory |
| **Increase** (positive quantity) | Debit Inventory, credit the reason's offset account |

Unit cost comes from the line cost you enter, or the item's cost when the line is blank. Warehouse **transfers** move quantity between locations without a journal entry, because both sides use the same Inventory account.

> [!WARNING]
>
> An adjustment cannot post until its reason has an offset account and the line has a cost. Drafts save without either.

## Related guides

> **[Inventory transactions](https://www.adorabl.info/products/inventory-transactions.md)**
>
> Record adjustments and transfers.

> **[Item GL accounts](https://www.adorabl.info/books/setup/system-accounts.md#item-gl-accounts)**
>
> The inventory account adjustments post against.

> **[Operations setup](https://www.adorabl.info/products/setup/operations-setup.md)**
>
> Full inventory setup checklist.

> **[Chart of accounts](https://www.adorabl.info/books/chart-of-accounts.md)**
>
> Add an expense account for shrink if you do not have one.


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