Everything You Need To Know About Abnormal Losses
Accounting is the backbone of any business. It helps track the expenses and income, ensure statutory compliance, provide the business owners, investors, and the government with essential financial information. This information helps to make further critical decisions about the business.
Businesses often suffer from regular and unplanned losses, and one such loss is abnormal loss. Companies face abnormal losses which are generally not expected to happen.
Different losses come under this category, such as lost shipments, accidents, fire in the warehouse or inventory, which puts additional pressure on the business. On top of that, these losses need to be logged into journals for accounting purposes.
If a massive fire breaks out in the inventory and damages some goods, the accountant has ...