You must take a physical inventory (that is, count the actual items on hand) to see if the quantity registered in the program 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.
Open the 
Phys. Inventory
Journal window.
Click Functions, Calculate Inventory.
In the Calculate Inventory window, on the Item tab, set a filter if you want to select specific item numbers, or items with specific departments, projects, location or bin codes.
On the Options tab, specify the conditions that the program will use to create the journal lines. For Help about a specific field, click the field and press F1.
Click OK.
The program processes the item entries according to the information that you specified, and creates lines in the physical inventory journal. Notice that the Qty. (Phys. Inventory) field is automatically filled in with the same quantity as the Qty. (Calculated) field. With this feature, it is not necessary for you to enter the actual inventory on hand for items that are the same as the calculated quantity.
Entering Actual Quantities on Hand in Journals
Posting Phys. Inventory Journals