Which one of the following statements is false?
A) An abnormal loss represents a loss of expected finished production from a process.
B) The cost of abnormal losses is reported as an expense in the costing statement of profit or loss in the accounting period in which it arises.
C) Highlighting the cost of abnormal losses from a process encourages management to investigate the causes of the abnormal loss and to take corrective action where necessary.
D) Abnormal losses are a debit in the process account.

Question

Quizplus · Accepted Answer

Abnormal losses are actually credited in the process account, not debited. They are treated as an output of the process and valued at the normal cost per unit, thus reducing the total cost allocated to the normal output.

Which One of the Following Statements Is False