Adjustment entry for outstanding expenses.

Outstanding Expenses :

An expenses for the current accounting period should be debited. It is immaterial whether it is paid in that accounting period or not. In case the same expense is not paid during the year, it becomes outstanding for that particular year. It is the liability of the business for that year and , thus, expense outstanding account will be credited as this is an representative personal account which will receive money after a certain period.
For example : creditor.


If salaries are outstanding of rs 5000. For December 2018 then the entry will be made as follow:

Salaries a/c.     5000
To salaries o/s a/c.     5000
(Salaries remaining unpaid for the month of December).