Question

21. Abnormal loss is equal to
(a) Input- actual output
(b) actual output- Normal output
(c) Normal output- actual output (d) Actual output-input​

Answer 1

Abnormal Loss

Explanation:

• Abnormal loss refers to a situation when a corporation experiences a loss that exceeds the traditional loss allowance.
• When a corporation experiences an abnormal loss, its total revenue doesn’t cover the full costs that it incurs. If the corporate experiences repeated abnormal losses, it can threaten the company’s survival.

What causes abnormal losses?

• An abnormal loss signifies that there are significant issues with the company’s production that require to be identified and glued as soon as possible.
• There are variety of things that may contribute to a business experiencing an abnormal loss. Examples may include:

1. Damage to the business
2. Theft of products.

Abnormal loss is equal to Normal output - Actual output.