Physical Inventory Overview Video
You must take a physical inventory, that is, count the actual items on hand, to check if the quantity registered is the same as the physical quantity in stock at the end of a fiscal year, if not more often. If there are differences, you must post them to the item accounts before you do the inventory valuation.
Apart from the physical counting task, the complete process involves the following three tasks:
- Calculate the expected inventory.
- Print the report to be used when counting.
- Enter and post the actual counted inventory.