Question

Wages were outstanding to the extent of Rs. 500 in Calcutta in respect of a worker. Hence, the amount tobe included in unsecured creditors will be :

Answer 1

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Answer 2

The amount included in the unsecured creditors will still be outstanding. As outstanding wages does not have an effect on unsecured creditors.

Hence the outstanding wages of ₹ 500 remains outstanding.

OUTSTANDING WAGES

• Outstanding wages are the expenses of the current financial year.

• They are related to current financial year but remain unpaid .

• As the expenses are unpaid during the financial year or current year, they are liability to the firm.

Treating of outstanding wages.

They must be debited and charged from profit and loss of the financial year.

And it will on liabilities Side of the balance sheet.

UNSECURED CREDITORS

• Unsecured creditors are the one with no security over a debtors assest for debt due to it.

• This poses a higher risk to the creditor because it will have nothing to fall back on should the borrower default on the loan.