Will inventory be in negative when the closing stock is higher than the opening stock and decrease will be in positive?


3 Answer(s)


You are right. Increase in inventory will be subtracted from the net income.

There are sometimes situations like "inventory write-offs" were old dated inventory has to be discarded - in this case also the inventory account on the balance sheet is decreased and the expense account on the income statement is increased.

Thank You for the reply.