Outstanding Expenses :
Expenses which have been incurred but not yet paid during the accounting period for which the final accounts are being prepared are called as outstanding expenses.
Example: Trial balance shows salaries paid Rs.22,000. Adjustment: Salary for March 2004, Rs.2,000 not yet paid.
Adjusting Entry
| Date | Particulars | L.F | Debit
Rs. |
Credit
Rs. |
|
2004 Mar 31 |
Salaries A/c Dr | 2,000 | ||
| To Salaries outstanding A/c | 2,000 | |||
| (March salary outstanding) |
Outstanding expenses will be shown
i) on the debit side of Profit and Loss account by way of additions to the particular expenses and
ii) on the liabilities side of the Balance Sheet.
Profit and Loss account
for the year ending 31st March, 2004
Dr. Cr.
| Particulars | Rs | Particulars | Rs | |
| To Salaries A/c | 22,000 | |||
| Add: Outstanding | 2,000 | 24,000 |
Balance Sheet as on 31st March, 2004
| Liabilities | Rs. | Assets | Rs. |
| Outstanding Salaries
|
2,000 |