Question

While calculating abnormal loss _________ is taken.

• A. Cost price
• B. Invoice price
• C. Sale price
• D. Market price

Answer 1

The correct option is A Cost price

While calculating abnormal loss, cost price is taken and proportional expenses of consignment are added to it to arrive at the value of goods lost due to abnormal loss. This is because taking the cost price helps us arrive at the abnormal loss correctly as goods sold are also generally valued in the same manner in the consignment account and it does not affect the other units which have not been affected by the abnormal loss.