The abnormal loss is debited to following

Solution

In consignment accounting, losses are classified as: • Normal Loss → Not recorded separately • Abnormal Loss → Loss beyond normal expectations (e.g., accident, theft, fire) Abnormal loss must be recorded separately, and its effect is ultimately transferred to the General Profit and Loss Account. Why not the other options? • Consignment A/c → used to record normal consignment expenses, not abnormal loss. • Consignee → not responsible for abnormal loss unless negligent. • Insurance Company → if a claim is admitted, the insurance proceeds reduce the loss but are not debited for the loss itself.