a) Outstanding Expenses and Unexpired Expenses

Those expenses which have been paid in advance and whose benefit will be available in future are called unexpired or prepaid expenses. e.g. insurance premium.

The expenses remaining unpaid at the end of the accounting period are called outstanding expenses. Certainly expenses like salaries, rent etc. of the every month will be paid in the next months.

b) Provision for Discount on Debtors and Provision for Discount on Creditors

When the discount is allowed it is recorded though the Cash Book and posted to the credit side of the concerned debtor's personal accounts. But, in the case of debts outstanding at the end of the current year, discounts will be allowed in the next year if the debtors make prompt payments. So, as in the case of anticipated loss on account of doubtful debts, a provision must be made for the discount likely to be allowed to the debtors in the next year, such a provision is known as the 'Provision for Discount on Debtors'

When prompt payment is received we allow cash discount to debtors. Similarly, we receive discount from the creditors when prompt payments are made by us. So the expected gain on account of discounts receivable from creditors in the next year should also be taken into account at the time of preparing the final accounts. Such a provision is called 'Provision for Discount on Creditors’.

c) Normal Loss and Abnormal Loss

Normal Loss: Loss of quantity of goods in the normal course of business and inherent and thus inevitable or unavoidable, such as loss because of loading and unloading of goods, leakage, evaporation or shrinkage is known as normal loss. The treatment of normal loss is to charge it to consignment account. The total cost of goods sent is charged to the units remaining. Value of stock is inflated to cover the normal loss. In other words such loss is absorbed by the remaining units. No separate entry is made in the books of consignor in case of normal. such loss is considered while calculating the cost of stock left unsold with the consignee. The value of unsold stock on consignment is increased because the value of stock is the proportion of the cost of the goods consigned and direct expenses that the quantity of stock bears to the total quantity of goods consigned as diminished by the normal loss of goods. In brief, valuation of stock will be made.

Abnormal Loss: This type of loss is an avoidable loss because it does not arise due to the nature of the goods. Such loss may arise due to hard luck of consignor (i.e. destruction of goods by fire, an accident or theft). Such losses are more or less abnormal and, in any case, do not occur frequently. This type of loss does not effect the value of goods and if part of the consignment has been lost in such a manner, one should debit the value of the goods lost to abnormal loss account/profit and loss account. and credit the consignment account so that one may judge the profitability of the consignment properly. In case, if this loss is ignored like normal loss, the profit shown by the consignment account will be lower than what it would have been, had the loss not occurred. So, we let the consignment account show the same result as the loss had not been taken place. On the preparation of the final accounts of the business (trading and profit and loss account), this loss is finally shown on the debit side of the profit and loss account being a loss of the business as a whole.