The journals created by conducting a stock take are a bit unusual from the normal journals that deal with stock. Most ERP and accounting systems now create journals when items are moved. Receiving stock from a supplier it will debit, or increase the inventory amount. To balance this, the credit amount wont generally get allocated to a purchase invoice as it would not have been raised yet, although the act of accepting the goods you are obliged to pay the supplier under their credit terms, usually 30 days from date of Invoice. So the time lines could be, receive goods month1, supplier sends out their invoice month 2 and you pay them month 3. So it no invoice at point of receipt, where does the credit go?( https://it-ebs.co.uk/news/stock-control-software-for-inventory-and-accounting/ )
This is where an abstract concept of a separate nominal code comes in. A liability account called accruals is set up. This is a dumping ground for expenses you know will be paid in a later period for something consumed now. The same way you would put away some of your salary to pay the electricity bill that is due in the second week of the following month, the accrual account is the pot that tracks current debt. Later when the supplier purchase invoice is posted the accrual transaction is reversed to creditor control and the VAT claimed. Liability to liability.
On the other side of the equation, when goods are delivered to customers a stock movement journal is created that credits stock (increasing levels) and debiting cost of sales as an expense
When doing a stocktake and you increase the levels, through miscounting or finding missing stock, then there is no credit side to this journal. You can’t accrue for a supplier invoice that will never come. The same problem exists for reducing stock levels. It would still be an expense, as damaged. Or stolen goods still cost you money, but it is not due trade so it should still be classified under a different category As there is no place to put the credit side or the opposing debit side, then an abstract nominal code has to be created.
I would put this under the cost of sales layout of accounts called something like “stock adjustment” which will become a dumping ground for stock take journals under the balance sorted out at the end of the financial year. If it is in debit then the expense has been incurred. We have developed an interactive tool which defines what Journals are created due to different type of stock movement(https://it-ebs.co.uk/downloads/) .