ADD: Every time you create one of the transaction as follow, you the item quantity that is used will be added to your inventory.
Customer Credit Memo
DEDUCT: The same way on the following transactions, the quantity will be deducted.
Vendor Credit memo
For the First time Adjustment when you have inventory from before, it is best to use "Initial Quantity on Hand"
For Further adjustments
Use "Single Item Inventory Adjustment" or "Bulk Inventory Adjustment"
Single Item Inventory Adjustment
Bulk Inventory Adjustment