The correct answer is: A. Profit and loss account.
A loss on an incomplete contract is transferred to the profit and loss account in the period in which it is incurred. This is because the loss is a direct result of the company’s operations in that period. The loss is then included in the company’s net income or loss for the period.
Option B, execution work, is incorrect because the loss is not directly related to the execution of the contract. The loss is a result of the company’s overall operations in the period.
Option C, partly to both of them, is incorrect because the loss is not allocated to both the profit and loss account and the execution work. The loss is only allocated to the profit and loss account.
Option D, certified work, is incorrect because the loss is not related to the certified work. The loss is a result of the company’s overall operations in the period.