Why is the Bin Qty Adjustment Field Disabled?

I attempted to adjust the quantity of an item through the Inventory Adjustment function; however, I cannot enter a quantity in the Bin Qty ► Adjustment field. The field is disabled. Why?

The Inventory Adjustment ► Bin Qty ► Adjustment field is disabled if a bin is not entered in the Bin field. Enter a bin in the Bin field before you enter the quantity.

Note: The Bin field is disabled if the item is not set to update on-hand quantity (the Inventory Maintenance ► Settings (1) ► General ► Update On-hand checkbox is not marked). You cannot adjust an item’s quantity if the item is not set to update on-hand quantity.