How do you record outstanding salary?

Outstanding salary is added to the salary and shown on the debit side of profit and loss account. It is further shown under the head current liabilities in the balance sheet. Outstanding salary is also known as Salary due (or) Salary payable.

Which concept suggests that if salary is outstanding The same should be shown as the liability of unpaid salary in the balance sheet?

As per matching concept, salary is due but not yet paid. So, Unpaid salary to be shown as liability under ‘Expenses Payable’ or ‘Salary Payable’ in Balance sheet on liabilities side and on other aspect of dual entry to be placed in Profit & Loss Account.

What entry is passed at the time of payment outstanding salary by company current account?

You would credit accrued wages/ salaries.

Why outstanding salary is credited?

Answer: Outstanding salary means unpaid or pending amount of salary. It is treated as liability and shown in the liability side of balance sheet, and added in salary in profit and loss account if is related with current year. So outstanding salary is credit in nature.

Why salary outstanding is credited?

Outstanding salary means unpaid or pending amount of salary. It is treated as liability and shown in the liability side of balance sheet, and added in salary in profit and loss account if is related with current year. So outstanding salary is credit in nature.

What defines outstanding salary account?

Any amount which is due to a person against which the services are already provided for is an outstanding expenses. These are personal account but put together clubbed and considered as representative person account.

How outstanding salary is personal account?

Answer. Nominal account is an account which is related and associated to losses, expenses, income and gain. But Outstanding salary is a personal account because it relates to actual persons. As the salary is due but not yet paid, so it doesn’t come under nominal account.

Which type of account is outstanding account?

The outstanding expense is a type of personal account, which carries a credit balance and thus this is treated as a liability for the business. The outstanding expense is represented on the liability side of the balance sheet of a business.

What is the meaning of outstanding salaries in accounting?

Answer: Outstanding salaries are the salaries that are due and have not yet been paid. For example if an employee of a XYZ company worked for a 4 month and still have not been paid so, the salaries are ‘owing’ or ‘payable’ or ‘outstanding’.