Question

Material lost in stores due to fire is
O transfer to next period
O capitalized
O abnormal loss and hence excluded from
cost
O a part of normal loss hence part of cost​

Answer 1

Answer:

Material lost in stores due o fire is abnormal loss and hence excluded from cost .

Answer 2

Answer:

abnormal loss and hence excluded from cost.

Explanation:

Material lost in stores due to fire is abnormal loss and hence excluded from cost.

• Abnormal waste or loss is one which is in excess of normal loss, arising due to abnormal causes or due to unforeseen factors.
• This cause or factor which is not common to production, or its occurrence is not generally seen in the ordinary course of production.

1. Defective materials
2. sickness of machines
3. managerial carelessness
4. natural disaster or calamity
5. fire break down etc. are example or causes of abnormal wastage.

• Abnormal wastage a/c debited and Process a/c is credited.

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