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This very interesting question.
Like if it is Asset than why don't we record it in balance Sheet . why we record it in income statement and why we close it in closing Entry,
Its a asset. once its consumed or depreciated it will be a expense.
It is an Expense ...and i ma agree with Mr.Moain Ali
Purchase is the cost of buying inventory during a period for the purpose of sale in the ordinary course of the business. It is therefore a kind of expense and is hence included in the income statement within the cost of goods sold and the closing inventories consider as Asset and recorded in Balance Sheet.
