ECONOMICS

Detailed explanation-1: -The meaning of abnormal loss is any accidental loss to the consigned goods or loss caused by carelessness. Examples of such losses are loss by theft or loss by fire, earthquake, flood, accidents, war, loss in transit, etc. Such losses are considered abnormal.

Detailed explanation-2: -Abnormal loss arises due to certain conditions like theft of goods, damage to goods due to substandard material, faulty equipment or natural calamities like fire, earthquake, floods, etc.

Detailed explanation-3: -Abnormal wastage of material arising due to abnormal reasons, i.e. theft, fire, careless handling, etc., is not added to the cost of production but is transferred to costing profit and loss account.

Detailed explanation-4: -2] Abnormal Loss Example: by theft or loss by fire, flood, earthquake, war, accidents in transit, etc. Such losses are more or less abnormal. Suppose a part of goods is stolen, now this will reduce the value of stock and therefore profit on consignment.

Detailed explanation-5: -Abnormal Losses: Losses that arises due to inefficiency in operations, carelessness etc. is called as abnormal losses. These losses are charged to coasting profit and loss account. Examples of abnormal losses are as follows: Breakage.