Question

In the books of consignor the abnormal loss should be credited to ___________.

• A. Profit & Loss A/c
• B. Consignment A/c
• C. Trading A/c
• D. Consignees A/c

Answer 1

Answer: (B)

Consignment A/c

Abnormal loss is the loss which is not incurred in the normal course of business. It is unexpected and not anticipated in advance as the reason for such a loss is generally not under control of the business (eg: theft, fire, natural calamity etc.). The treatment of such a loss is to debit the profit and loss account and credit the consignment account to arrive at the profit as per consignment account correctly.