Question

Where actual loss in a process is less than the anticipated loss, the difference between the two is considered to be ____________.

• A. Abnormal loss
• B. Normal loss
• C. Abnormal gain
• D. Normal gain

Answer 1

Answer: (C)

Abnormal gain

Losses during the production can be segregated as normal losses and abnormal losses. Normal losses are those which occur during the process and is not controllable. In process accounting, a predetermined % is considered as normal loss which is estimated based on historical data or industry standards.

During the process the actual losses may differ from the estimated losses. If the actual loss is less than the predetermined loss, difference is considered as abnormal gain.