What are the steps to perform inventory counting with cycles in QuickBooks Online?

• A. Create a new inventory asset, count once at year-end, run Balance Sheet
• B. Enable Inventory tracking, perform periodic counts by item, adjust quantities on hand to match physical counts, and run the Inventory Valuation report
• C. Disable Inventory tracking during counting
• D. Use the Sales Order feature to track cycle counts

Answer: (B)

Cycle counting in QuickBooks Online is about keeping inventory records accurate by regularly checking a subset of items and updating the system to reflect the physical stock. Start by turning on inventory tracking so QuickBooks can monitor quantities and values for each item. Then perform periodic counts by item (or by the items you’ve chosen to cycle) instead of doing a full year-end count. After you complete the physical count, adjust the on-hand quantity to match what you found, using the Adjust Quantity on Hand function so the system reflects the true stock level. Finally, run the Inventory Valuation report to review current quantities, costs, and total inventory value, helping you spot variances and maintain accurate records. This approach keeps inventory accurate on an ongoing basis and supports proper valuation.