Solve the attachment on sheet with explanation : )
Answers
Answer:
Explanation:
TREATMENT OF OUTSTANDING EXPENSE
If given only in Trial balance
- Balance sheet Liability side
If given in Adjustment
- Trading / Profit and Loss account Debit side. Add with concerned expense
- Balance sheet liability side
Adjustment Entry
Expense a/c dr.
To Outstanding expense a/c cr.
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1. Salary
Salary paid during the year = 15,500
(+) Outstanding during the year = 2,500
Amt debited to P & L a/c is 18,000
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2. Electricity charges
Charges paid during the year = 3,200
(+) Outstanding during the year = 1,800
Amt debited to P & L a/c is 5,000
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3. Commission
Paid during the year = 5,400
(+) Outstanding for the year = 800
Amt debited to P & L a/c is 6,200
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Treatment in Balance Sheet
Liability side → Out standing expense → 11,300
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