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Journal Entry for Outstanding Expenses | Expense Payable | Unpaid Expense

Arjun EP

Published on: June 20, 2020

Outstanding Expenses | Expenses Payable | Unpaid Expenses

Outstanding expenses is also known due, payable, to be paid or unpaid.

When work completes within an accounting year but not paid is known outstanding expenses.

In next accounting year, it should be paid.

These outstanding expenses may be on operating expenses, selling and distribution expenses and financial expenses.

Outstanding Expenses

Salary^# account

To Cash account

To Bank account

To Outstanding salary (Salary payable)

(Being- salary paid and payable)

salary paid expenses

paid in cash

paid by cheque

payable but not paid

Increase in expenses

Decrease in assets

Increase in liabilities

Journal Entry

In the book of …………

Date

Particulars

Amount Dr

Amount Cr

Expense account (by name)

To Cash account

To Bank account

To Outstanding* expense (Expense payable; by name)

(Being- salary paid and still payable)

xxxxx

Keep in Mind (KIM)

Payable mean expenses have incurred but payment is not paid.

Outstanding* = due = payable = to be paid = unpaid

Salary^# is supposed transaction.

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PROBLEM: 10

The following transaction is given you by GK Importer (P) Ltd:

5 Jan: Interest Rs 15,000 is unpaid to City Finance Company.

10 Jan: Outstanding commission expenses $2,000

20 Jan: Insurance is to be paid $8,000.

29 Jan: Salary payable $30,000.

30 Jan: Wage paid $15,000 and still payable $2,000.

31 Jan: Advertisement paid $8,000 and outstanding advertisement $2,000.

31 Jan: Rent due to house owner Mr Pathak $12,000.

Required: Journal entries

SOLUTION:

Journal Entry for American Style

Date

Debit $

Credit $

Jan, 5

Interest account

Interest payable account

To record interest payable to City Fin Co

15,000

Journal Entry for European Style

Date

€

Jan, 5

Interest account

Interest payable account

To record interest payable to City Fin Co

15,000

Journal Entries

In the book of GK Importer (P) Ltd

Date	Particulars		LF	Amount Debit	Amount Credit
5 Jan	Interest account To Outstanding interest (Interest payable) (Being- interest is payable to City Finance Company)	Dr		15,000	15,000
10 Jan	Commission account To O/s commission (Commission payable) (Being- commission is outstanding)	Dr		2,000	2,000
20 Jan	Insurance account To O/s insurance (Insurance exp. payable) (Being- insurance is outstanding)	Dr		8,000	8,000
29 Jan	Salary account To Outstanding salary (Salary payable) (Being- salary payable)	Dr		30,000	30,000
30 Jan	Wages account (total) To Cash account To Outstanding wage (Wage payable) [Being- wages paid and payable)	Dr		17,000	15,000 2,000
31 Jan	Advertisement expenses account (total) To Cash account To O/s advertisement (Ad. expense payable) (Being- advertisement paid and payable)	Dr		10,000	8,000 2,000
31 Jan	Rent account To Outstanding rent (Rent payable) (Being- rent due to house owner Mr Pathak)	Dr		12,000	12,000