OUTSTANDING EXPENSES

Expense which have been incurred during the year and whose benefit has been consumed during the year but have not been paid are called Outstanding Expenses .At the end of the accounting year , such expenses must be accounted in the books of account , otherwise profit will be overstated and in the case of loss , it will be shown at lesser amount . Also , liabilities will be shown at lesser amount in the Balance Sheet Examples , being outstanding wages , salaries , etc .

The adjustment entry for Outstanding Expenses is : 

Expenses A/c           ...Dr 

   To Outstanding Expenses A/c 

( Being the unpaid expenses ( rent provided )

Is case , Outstanding Expenses appear in the Trial Balance , it means that the adjustment entry has already been passed ,i.e., the expense already stands increased by the amount outstanding . In such case , outstanding Expenses are shown only in the Balance Sheet as a current liability