A. Valued at cost per unit and debited to Profit & Loss Account
B. Shown as an asset
C. Valued at scrap value, and cost per unit is adjusted
D. Not recorded separately; its cost is absorbed by good units
Answer: Option C
Solution (By JKSSB Mock Tests)
Normal loss is expected; its scrap value, if any, reduces the cost of good units. The loss quantity is deducted, and cost per unit is computed on input minus normal loss.
Which of the following is/are correct regarding the accounting equation? 1. The equation always holds true under the double entry system. 2. Purchase of goods on credit increases assets and liabilities. 3. Payment to creditors decreases assets and increases liabilities. 4. Introduction of capital by the proprietor increases both assets and capital.
Explanation:
Statement 3 is incorrect because payment to creditors decreases both assets (cash/bank) and liabilities (creditors). 1, 2, and 4 are correct.
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