The disposal cost of abnormal loss is included in the abnormal loss account and therefore in the transfer of the cost of abnormal loss to the statement of profit or loss.

Related MCQs

• When the abnormal has a scrape value the net cost of abnormal loss (cost of abnormal loss minus its scrap value) is then transferred as a cost to the cost accounting income statement at the end of the accounting period.
• In some cases, a company might have to pay to dispose of losses in a process. The cost of disposal represents an additional cost to the process. To reflect this in the process account the normal loss is measured at zero but the expected costs of disposal are debited to the process account.
• It is possible to have abnormal loss and abnormal gain on the same process account in the same period.
• Which of the following procedure is incorrect for attributing overhead costs to cost units? I. Collecting production overhead costs by item II. Establishing cost centres III. Allocating and apportioning overhead costs to cost centres IV. Apportioning service cost centre costs to production cost centres V. Absorbing production cost centre costs into cost units
• When the completion stage of the contract is more than half, the profit to be credited to Profit and Loss account will be equal to…………..
• If the amount of work certified is less than………of the contract price,then no profit should be taken to Profit & Loss Account.
• The difference between total actual loss and normal loss is abnormal loss.
• The over-absorbed overhead is accounted for as an adjustment to the profit in the period, and is added to profit in the cost accounting income statement.
• A separate record must therefore be maintained to show the details of individual jobs. Such records are often known as job cost sheets or job cost cards.
• In a costing system, a job account is similar to a work in progress account, except that it is for one job only. In a company that specialises in jobbing work, the work in progress account is the total of all the individual job accounts.