Question

Abnormal loss of joint venture is debited to the following account -

• A. Joint Venture A/c
• B. Insurance Company A/c
• C. General Profit & Loss A/c
• D. No Account

Answer 1

The correct option is D No Account

Abnormal loss is a loss which is not expected or anticipated by the business as it is due to reasons beyond our control. Loss caused due to theft, fire, accident, floods or any other natural calamity is an abnormal loss. The abnormal loss of joint venture is not debited in any account. However, if the goods were insured and the insurance claim is received, the joint venture account is credited by the amount of claim received.