Question

When the actual loss is more than the estimated loss, the difference between the two is considered to be ____________.

• A. Abnormal loss
• B. Normal loss
• C. Loss
• D. None of these

Answer 1

Answer: (A)

Abnormal loss

Losses can be defined as normal loss and abnormal loss. A loss which occurs normally during the process of production is called as normal loss. Loss over and above the normal loss is considered as abnormal loss. Abnormal loss should not be charged to production cost.