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Question
Give the word / term or phrase which can substitute the following statement.
Expenses which are due but not paid at the end of the year.
Solution
Outstanding Expenses
Explanation: Expenses which are due but not paid at the end of the year are outstanding expenses. The benefit of such expenses has been derived in the current year but the payment of these has not been made yet. Outstanding expenses are classified under personal accounts because they represent those persons to whom the payment is to be made. Such expenses are shown on the Liabilities side of the Balance Sheet.
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RELATED QUESTIONS
State whether the following statement is True or False.
Outstanding expenses are shown on the liability side of the Balance Sheet.
State the meaning of Outstanding expenses
Give the journal entries for the following adjustments:
(a) Outstanding salary ₹ 3,500.
(b) Rent unpaid for one month at ₹ 6,000 per annum.
(c) Insurance prepaid for a quarter at ₹ 16,000 per annum.
(d) Purchase of furniture costing ₹ 7,000 entered in the purchases book.
