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Outstanding Expenses

Outstanding expenses refer to those expenses which are accrued as well as due, but the amount has not been paid during the current accounting period. Generally rents and salaries which are paid in the subsequent months are shown as outstanding as on the last date of financial year.

Impact on financial statements

  • In Profit and Loss Account, outstanding expenses will be added to the respective expense as it relates to the current year (accrual)
  • In the Balance Sheet, an outstanding expense will appear as a liability

The following journal entry is passed:




Debit (₹)

Credit (₹)


Respective expenses A/c         Dr.




   To Outstanding expenses A/c


Note: The above entry will be reversed in the subsequent period. If the outstanding expenses appear in the trial balance, it means such adjustment entry is already passed.

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