You must complete[A.3.5a Create an Inventory Product with Quantity](https://scribehow.com/shared/A35_Create_an_Inventory_Product_with_Quantity__f1iNSHY3R8qjO9pyY1RlcA)in the same Sample company session prior to completing this exercise.
Now let's get started with the exercise. First, head over to the Products & Services list.
1
Click the Gear icon.
Zoom Saved
2
Click "Products and services".
Zoom Saved
Since the list is showing that Craig currently has a Quantity on Hand, the correct procedure would be to first adjust the quantity.
3
On the Cherub line, click the "down arrow" next to Edit, then select "Adjust quantity".
Zoom Saved
Doing it this way allows you to select the correct shrinkage account.
Zoom Saved
Let's see what happens if we delete the product (i.e., make it inactive) without doing this first.
4
Click "Close".
Zoom Saved
5
On the Cherub line, click the "down arrow" next to Edit, then select "Make inactive".
Zoom Saved
6
Click "Yes".
Zoom Saved
By doing it this way, QBO has automatically selected the "Inventory Shrinkage" account for the adjustment. Let's take a look.
7
Click "Accountant Tools".
Zoom Saved
8
Click "Chart of accounts".
Zoom Saved
9
On the Inventory Asset row, click "View register".
Zoom Saved
QBO has reduced the value of the Inventory Asset account by the cost of the 10 Cherubs that were remaining and offset it to Inventory Shrinkage.
Zoom Saved
You can now create the non-inventory Cherub product with a slightly different name.
🎥 Video
Want to follow along? [Click here](https://youtu.be/9jNKItMgJo4) for our video walk-through.
📝 Feedback
Was this Scribe helpful? Save this document for future reference.
Save for Later
Have something to say?Create an account to leave messages for the author to see!Create an account
Feedback
This Scribe is in tip-top shape!Leave feedback if there are any issues with this Scribe