Inventory adjustments are increases or decreases made in inventory to account for theft, loss, breakages, and errors in the amount or number of items received. Inventory adjustments are increases and decreases made to inventory to match an item's actual on-hand quantity. An overstated inventory lowers the cost of goods sold. COGS is an expense item computed by subtracting the closing stock from the sum of the opening stock and purchases.

The above screenshot represents the add inventory adjustment page. After adding inventory adjustments that are displayed in inventory hystory page.