• Last in, First Out (LIFO): You use or sell the most recently received items first
• First in, First Out (FIFO): You use or sell the oldest items first

Back up all company data before adjusting the unit cost.

Standard Cost

• Use the Standard Cost Adjustment utilities
• This utility will correct the Standard Cost, and properly update the General Ledger files
• For more information, see changing the Standard Cost of inventory items using Standard Cost Adjustment Entry

Average Cost

1. Adjust out the total quantity in all warehouses. Use the current (incorrect) average cost for the adjustment.
   • This adjustment will reduce the inventory quantity and value to 0
2. Adjust the same quantity back in at the correct average cost.
   • This transaction will update General Ledger with the new inventory value

LIFO, FIFO, Lot, and Serial

Make both negative and positive adjustments to the same cost tier. Click the Distribute button on the Transaction Entry Lines tab. Distribute quantities to the correct cost tier using receipt date and reference or lot/serial number. For example, with FIFO, enter a negative adjustment for the incorrect cost in that tier. Then distribute the same quantity back to that tier with the correct cost.

 NOTE: For Serial or Lot items, update the negative adjustment first. Then enter the positive adjustment. For other valuation methods, you can include both adjustments in the same update. 

Steps for Transaction Entry

1. Open Inventory Management, Main, Transaction Entry.
   1. Select Transaction Type Adjustments.
   2. Click # for the next available Entry Number.
   3. Select Default Warehouse.
2. Click the Lines tab. Choose the Item Number you want to correct.
   
   1. Enter Quantity as a negative number that will relieve the total quantity on hand for the warehouse selected.
   2. If items use LIFO, FIFO, Lot, or Serial valuation, select the tier you want to adjust.
   3. The old (incorrect) cost will populate the Unit Cost. Click OK.
3. Select the same Item Number.
   1. Enter the Quantity as a positive number. This will add the amount back to the warehouse's total quantity on hand.
   2. If items use LIFO, FIFO, Lot, or Serial valuation, select the tier to adjust. You can also create a new tier.
   3. Enter the new (correct) cost for the Unit Cost. Click OK.
   4. Click Print.
4. On the Inventory Transaction Register screen, confirm the correct Inventory Management Posting Date and click Print.
5. Do you want to update the Inventory Transaction Journal?", click Yes.
6. Do you want to print the Daily Transaction Register?", click Yes.
7. On the Daily Transaction Register screen, click Print.
    NOTE: The difference between the original and new cost posts to the Inventory Adjustments account. Set this account in Inventory Management, Setup, Product Line Maintenance. 
8. "Do you want to update the Daily Transaction Register?", click Yes.

 How to adjust the Quantity On Hand for an Item