Q41
The type of loss that should not affect cost of inventories is ________.
A.
normal loss
AnswerB.
abnormal loss
C.
seasonal loss
D.
standard loss
Answer: Option A
Solution
Answer: Option A
Solution:
The type of loss that should not affect cost of inventories is normal loss. loss:The loss expected or anticipated prior to production is a normal process loss. It is thus called a standard loss. A provision for such a loss is made before starting production. Weight losses, shrinkage, evaporation, rusting etc. are the examples of normal loss. Normal loss increases the cost of production of the usable goods realized.