When we are doing the double entry for the closing inventory, why do we credit the inventory? I understand why we debit the closing inventory but not why we credit it.

Respuesta :

Answer:

Debiting in this case means to add to the inventory. Therefore, crediting means that inventory was used up when closing inventory.

Explanation:

A debit is an accounting entry that either increases an asset or expense account, or decreases a liability or equity account. ... A credit is an accounting entry that either increases a liability or equity account, or decreases an asset or expense account.