How to write the closing inventory journal

Closing inventory is not in the ledger until a journal puts it there. The journal is written at the year end, once the count has been valued.

Debit

Closing inventory (statement of financial position): an asset, the goods still held

Credit

Closing inventory (statement of profit or loss): it reduces the cost of goods sold

Fernbank's closing inventory is £2,160. The same figure goes to both accounts.