Accounting · Process Costing
What is the most critical difference in the cost treatment of Normal Loss and Abnormal Loss in a Process Costing system?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1Normal Loss is mandatory to convert into Equivalent Units, but Abnormal Loss is not.
- 2Normal Loss cost is borne by the good units of production, whereas Abnormal Loss cost is charged to the Costing Profit and Loss Account.✓
- 3Normal Loss is valued at its scrap value only, while Abnormal Loss is valued at the full cost per unit.
- 4Normal Loss is debited to the Costing Profit and Loss Account, while Abnormal Loss is absorbed by good production.
Correct answer
Normal Loss cost is borne by the good units of production, whereas Abnormal Loss cost is charged to the Costing Profit and Loss Account.
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Accounting?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Process Costing MCQs →Want more practice questions on Process Costing?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Accounting · Process Costing