CA Inter P4 · Chapter 9 · Question 3 of 11
Continuing the same process (abnormal gain of 100 units valued at ₹56 per unit; scrap value of normal loss ₹8 per unit), the net amount credited to the Costing Profit and Loss Account from the Abnormal Gain Account is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) ₹4,800
Explanation
The Abnormal Gain Account is credited with ₹5,600 transferred from the process. Because 100 fewer units were lost than expected, scrap sales are lower by 100 x ₹8 = ₹800, which is debited to the Abnormal Gain Account. The net gain transferred to the Costing Profit and Loss Account = ₹5,600 - ₹800 = ₹4,800.
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