In a perpetual inventory system, the closing entries include a credit to the Inventory account in an amount that equals the ending inventory, and a debit to the Inventory account in an amount that equals the beginning inventory.

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In a perpetual inventory system, inventory balances are continuously updated, so there are no closing entries specifically for crediting or debiting the Inventory account to adjust for beginning or ending inventory. Instead, purchases and sales directly adjust the Inventory account throughout the period.

In a Perpetual Inventory System, the Closing Entries Include a Credit