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It is accidental loss of goods or theft of goods. Accidental loss includes earthquake, flood, accidents, war, etc.
Abnormal loss means that, loss which is caused by unexpected or abnormal conditions such as accident, machine breakdown, substandard material etc.
Unexpected loss for which the company has no provision. It should be non-recurring by taking approriate remedial action at right time.
abnormal loses are loses which a company faces than it really shoud be . it can be said as company is not producing enough revenue to maintain the smooth running of company . if the company is not even generating profit to cover up the cost inputted can be termed as abnormal loss
Abnormal Loss is controllable loss which can be avoided by taking right action
Abnormal losses occur when a business entity incurr losses beyond any anticipated losses, this can be due to a sharp rise in production materials or change in government policies or market contraction or use of obsolute equipment. In most cases business entities will close down if no new business strategy is put in place to remedy the situation.
These are losses which are unforeseen in the normal operation of the business. They can also be described as losses above normal losses. Normal losses are losses that are anticipated in the normal operations of a business.
In Formular
Abnormal loss= Total loss- Normal loss
An abnormal loss refers to a situation where a business or firm is making profits below the normal limits. In an abnormal loss situation the total revenue of a business does not cover total cost incurred for the business. If abnormal losses persist in a firm or business, it will threaten the property of the firm or the business.
Generally, an abnormal loss occurs because of negligence, carelessness, theft, mischief, fraud of employees, or inefficiency. Some of the examples of abnormal loss are destruction of goods by fire, theft, breakage, or loss of goods because of mishandling
An abnormal loss refers to a situation where a business or firm is making profits below the normal limits. In an abnormal loss situation the total revenue of a business does not cover total cost incurred for the business.
Its the result of actual output minus normal loss. For Eg. if a manufacturing firm estimates an 5% as normal loss of their shift production, then in a Shift for an output of 100 units, 5 units will be the normal loss. So if in any case if the actual output is less than the 95 units, it will be resulted in abnormal loss and if actual output exceeds expected output then it results into an abnormal gain i.e. anything more than output of 95 units. While calculating the cost per unit, normal loss is usually adjusts to the actual output, whereas abnormal loss is charged to Cost of goods sold account.
