The loss incurred on an incomplete contract is transferred to _________ account.

Costing profit and loss

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Profit and loss

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Trading

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Depreciation

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Solution

The correct option is B Profit and loss
In contract costing, there will be no difficulty in dealing with the profit if the contract is completed in the same financial year. If contract is incomplete there are certain rules on the basis of which a proportionate amount will be transferred to profit & loss account.
In case of loss on incomplete contract, this will be transferred to profit & loss account.

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Similar questions

Q. Entry for transfer of gross loss is -
Trading A/c Dr.
To Profit and Loss A/c

Q. _________ process loss should be transferred to costing profit and loss account.

State whether the following statement are true or false.

1. Final Accounts are prepared on the basis of Trial Balance.
2. Trading Account is a part of Profit & Loss Account.
3. Profit Loss Account is prepared to find out Gross Profit or Gross Loss.
4. Gross Profit or Gross Loss is transferred to Balance Sheet.
5. An amount of net profit is added to the capital.
6. All indirect expenses are debited to trading account.
7. Balance Sheet is a statement and not an account.
8. Capital account is a personal account.
9. Amount of prepaid expenses appears on assets side.
10. Bank Overdraft is a liability of business concern.

Q. Which are the accounts which are not balanced but transferred to Trading A/c or Profit &loss A/c?

Q. Entry for transfer of Gross profit is :
Profit and Loss A/c Dr.
To Trading A/c

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