Question

…………………expenses are excluded from cost. A) Normal
(B) abnormal
(C) both a & b
(D) none of these

Answer 1

• Expenses may be normal or abnormal.
• Normal expenses are expenses that are used for normal routine operation of the business.
• Abnormal expenses are expenses that implies profit or the loss of the account.
• The Abnormal expenses are excluded from the cost because it may not be fixed.It may be vary based on the business.
• We cant predict the abnormal expenses.
• Hence,Therefore the option is (B)

#spj3

Answer 2

(B) abnormal is the right answer.

Explanation:

• Expenses/losses are described as ordinary and extraordinary.
• Expenses that can be spent for the ordinary habitual operation of the commercial enterprise are taken into consideration ordinary costs/losses and to be blanketed withinside the fee.
• Abnormal costs aren't charged to cost and debited to the earnings & loss account.
• Finally, abnormal expenses are unplanned costs.
• In fee, they may be extraordinary losses and get up because of a loss of preservation and care on the part of the control of the commercial enterprise and personnel in operations.
• If care and maintenance are organizational cultures, there may be minimal extraordinary costs.
• For example, with the aid of using robbery or loss with the aid of using fire, flood, earthquake, war, injuries in transit, etc.
• Such losses are extra or much less abnormal.
• Suppose part of goods is stolen, now this could reduce the value of stock and therefore earnings on consignment.

#SPJ6