what is inventory offset account?

In accounting applications, it is useful to have default accounts. A
default account is used if no other account is selected.

GP allows you to make inventory adjustments. These adjustments are normally
done to increase or decrease inventory quantities. They would be used if
you needed to write off a damaged item. They would also be used if you
counted a few items and wanted to correct the item quantities.

By default, the offset account is used for these transactions. If you are
increasing inventory, GP will debit the inventory account and credit the
offset account. If you are decreasing inventory, GP will credit the
inventory account and debit the offset account.