Abnormal loss??????

Can anyone explain me  why abnormal losses are credited to Trading a/c??? For e.g when  goods worth Rs 200000 are consigned and are lost in transit and insurance Co. pays 40%, so in this case entry is:

Bank A/c                      Dr. 80000

loss due to accident Dr. 120000

          To trading A/c                        200000

So kindly explain why its going to trading a/c inspite of the fact whengoods are consigned entry made is

Goods sent on consgnmt      Dr.

          To Trading A/c....

Thanks in Advance


 

Replies (1)
You should read consignment accounts again. When goods are consigned entry is consignment A/c debited Goods sent on consignment A/c credited. The Goods sent on consignment A/c is shown in tradingA/c as subtraction from purchase. Now when goods lost in transit, a new account Goods lost in transit opened and value of goods lost debited to it and consignment account credited. On receiving of claim from insurance company Goods lost in transit credited with the amount received and balance left in this account i.e. Abnormal Loss transfered to Profit and Loss account i hope it is clear to you.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 07 October 2026
Article Assistant

Malhotra Rajesh & Associates

New Delhi

B.Com

View Details
Company
ARTICLESHIP 23 October 2026
Articled Trainee

J Y & CO

Hyderabad

CA Inter

View Details
Company
ARTICLESHIP 17 October 2026
Articled Assistant

RRPM & Associates LLP

Chennai

CA Inter

View Details
Company
08 October 2026
Account Executive

Elite Taxation

New Delhi

CA Foundation

View Details
Company
ARTICLESHIP 20 October 2026
CA ARTICLE

AMKN & CO

Noida

CA Inter

View Details
Company
24 October 2026
CA Industrial Trainee

Fytomax Nutrition Private Limited

Aurangabad

CA Inter

View Details
Company
13 October 2026
Accountant

Zerdi & Co. Chartered Accountants

Pune

B.Com

View Details
Company
07 October 2026
Senior Account Manager

Amplio Invest

Mumbai

M.Com

View Details