What type of inventory adjustment should be made to decrease the quantity of on-hand inventory?

To decrease the quantity of on-hand inventory, the appropriate adjustment involves directly reducing the inventory count. This action reflects the accurate status of your inventory, accounting for factors such as sales, damages, or stock removals. When you select the adjustment to decrease the quantity, you are effectively lowering the recorded amount of items available in stock.

This is essential for maintaining accurate financial records and ensuring that inventory management aligns with actual inventory levels. It helps prevent overstock situations, allows for better inventory control, and supports decision-making processes regarding purchasing and stock replenishment.

The other options do not serve this purpose; increasing quantity would lead to an artificial inflation of stock levels, whereas revaluation pertains to changing the monetary value of inventory rather than its physical count. An inventory count typically involves a verification process to check existing stock but does not inherently adjust the figures unless discrepancies are found and corrections are made. Thus, directly decreasing the quantity is the correct approach to accurately reflect a reduction in your inventory.