Question

salary-5500. adjustment: one month salary is outstanding....how will it be calculated and shown in Final accounts​

Answer 1

Answer:

Outstanding salary means salary which is due.it is a liability that is shown in the liability side of Balance sheets and also added to salary head in the profit and loss account. Answer: ... And Outstanding salary i.e. 5000 × 4 = 20000 (this outstanding salary will be shown in debit/Assets side of balance

Explanation:

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Answer 2

Answer:

In the given question, Salary for one month is 5500.

One month provision i.e. Outstanding Salary 5500 must be created by debiting Salaries A/c and crediting Outstanding  salaries A/c

Treatment of final accounts:

As per accounting standards, for every known loss / expenditure provision must be created. Therefore, a provision based on previous month is made for balance 1 month (5500* 1month) 5500

Outstanding liability is classified as current liability.

Journal Entry for Adjustment :

Salaries  A/c---------------------------Dr          5500

        To Outstanding Salaries A/c                        5500

(Being provision for O/S salaries created)