Query about abnormal loss

can anyone explain me why abnormal loss is credited 2 trading account??
Replies (5)

Dear Pooja,

 

Abnormal loss is the loss over and above the normal loss of the raw materials. Since the goods are lost, that is, they have moved out of the factory, it will be credited to the Trading A/c.

It is based on the main principal of Accounting i.e Debit What comes in and Credit What Goes Out

 

Also, the loss due to the said wastage, will automatically get adjusted in the trading account
 

 

thank you....i got it

the main funda is that trading account gives us gross profit and that should not be swinged by abnormal reasons .so it is credited to trading account.

this is in conjunction with the premise that trading account shows us cost of goods sold --normal cost

 

as per the provisions of cost accounting u can charge only normal loss from the customer i.e. from the price and cannot charge the abnormal loss from the customer.

since the abnormal loss arises from the reasons other than normal course of business, hence your will have to bear the cost of abnormal loss by debiting it to profit & loss account.

 

I am sorry to interject but no one can stop anyone from charging abnormal or super abnormal loss to customer. Cost accounting principles least of all dissuade it. All cost accounting principle theorise  that for your own purpose please calculate normal cost of production by incl only normal costs.

 

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

S.K.Bajpai & Co.

Noida

B.Com

View Details
Company
15 October 2026
Senior Accountant

Continental Belting Pvt Ltd

Mumbai

B.Com

View Details
Company
28 October 2026
Assistant Director/ Associate Director-Finance & Accounting

Krea University

Chennai

CA

View Details
Company
ARTICLESHIP 22 October 2026
Articleship intern

Srinath Manikanta

Hyderabad

CA Inter

View Details
Company
ARTICLESHIP 23 October 2026
CA Articleship / Article Assistant

M N Rao & Associates LLP

Vijayawada

CA Inter

View Details
Company
14 October 2026
Accountant

Rize.farm

Bengaluru

B.Com

View Details
Company
07 October 2026
Senior Account Manager

Amplio Invest

Mumbai

M.Com

View Details
Company
08 October 2026
Accounts and Tax Associate

POOJA R TELI & CO

Pune

CA Inter

View Details