Journal Entry for Outstanding Expenses
Outstanding expenses are those expenses which are due but have not been paid, so for example if a company has not paid salary for the month of July than it is an outstanding expense for the month of July and company has to bring it into the books of accounts, outstanding expenses can be rent, insurance, salary, wages and so on. Given below is the journal entry which is passed for recording outstanding expenses into the books of accounts of a company –
Expenses account Dr
To Outstanding Expense account
In the above entry since expense is an outflow it is debited in the books of accounts, and outstanding expense being the liability for a company it is credited in the books of account. In the balance sheet the treatment for outstanding expenses will be to show outstanding expenses as current liabilities on the liability side of the balance sheet.
Tags: Outstanding Expenses