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Normal loss in restaurant

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Atharv Sankliya

1359 Points Posted on 28 January 2023

if a customer take a delivery of his order and not paying for it does it is considered as normal loss if not what will be the entry for it ?

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Quick Summary

If a customer receives a restaurant order via delivery but doesn't pay, it's not considered a normal loss. Normal losses are typically expected and routine, like those in manufacturing due to evaporation or pilferage. In a restaurant setting, such losses are usually absorbed by the cost of goods sold. The correct accounting treatment for non-payment is to write it off as a bad debt.

CA Raj Doshi

Practising CA

8954 Points Posted on 29 January 2023

Write off as Bad Debts. It is not normal loss. Normal loss is generally an expected routine loss used in manufacturing parlance. For example, loss due to evaporation/pilferage etc