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abnormal gain treatment

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › abnormal gain treatment

  • This topic has 1 reply, 2 voices, and was last updated 2 months ago by John Moffat.
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  • April 1, 2022 at 8:04 pm #652547
    noitiut
    • Topics: 7
    • Replies: 5
    • ☆

    What is the correct treatment for an abnormal gain at the end of the year in process costing?
    1. Carried forward as a credit balance in the abnormal gain account
    2. Carried forward as a debit balance in the abnormal gain account
    3. Written off as a debit to the statement of profit or loss
    4. Written off as a credit to the statement of profit or loss

    Sir I didn’t understand the question. the abnormal gain is credited to the abnormal gain a/c and then after debiting the a/c with the scrap proceeds, the actual gain is then credited to the SOPL and hence the abnormal gain a/c is debited. Which part is the question about? Please explain
    the ans is 4.

    April 2, 2022 at 8:26 am #652555
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 49595
    • ☆☆☆☆☆

    The answer is 4.

    1 and 2 are not correct because we do not carry forward a balance on the abnormal gain account.

    4 is correct because, as you have stated, rather than carry forward a balance we credit the SOPL with the amount of the gain.

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