The Source Location will always be Inventory adjustment and the destination will be Stock. The quantity will be computed using formula Real quantity - Theoretical quantity.
Let's assume that the stock of the material has been updated from 320 to 400.
The Inventory Adjustment will be done for the difference of 80 units, Real quantity (400) - Theoretical quantity (300). Look at the following screen for INVENTORY ADJUSTMENT.
Now, let's move on to the next scenario.