Normal loss of goods is that part of loss which is unavoidable. Normal loss occurs because of some inherent, natural or unavoidable reasons. Examples of loss are of coal in loading and unloading, loss of spirit or petrol due to evaporation, loss of timber in cutting into pieces and so on. Suppose 100 tons of coal at the rate of Rs. 75 per ton was consigned to the consignee who received 95 tons of coal and the remaining 5 tons of coal was wasted in loading and unloading. It can legitimately be said that the cost of 95 tons of coal is Rs. 7,500 (75 tons x Rs. 100 per ton). Loss of normal type should be apportioned on the amount of unsold stock in the proportion of the above example, 10 tons of coal was left unsold with the consignee, and it will be valued like this.
7,500/95 x 10 = Rs. 789.50
In case of normal loss of goods, no entry is to be passed in the books of consignor as well as the consignee.