Question

outstanding salary paid do journal entries​

Answer 1

Answer:

The concept of salary outstanding comes into picture due to accrual concept.

Expenses are booked when they are incurred and not when they are paid.

Journal Entry

Salary a/c Dr

TO Salary Outstanding a/c

Justification :-

Salary A/c - Increase in expense - So it is debited.

Salary Outstanding - Increase in Liability - So credited. As we are liable to pay.

Salary account is closed by transferring to Profit and Loss a/c

Salary Outstanding is shown on Liabilities side of balance sheet.