Outstanding expense

Vijaya Lekshmi Menon (Student - ICAI) (53 Points)

17 February 2013  

I have a doubt.

If an expense is outstnding at the end of the year,then we have to credit the concerned expense outstanding account...right?But my doubt is that what type of an account is that..

say,if I carries on a business and if I have not paid the salary of Rs1,00,000 to the employees ,then the adjustment entry will be

         Salary A/C   ......................................Dr

                                 To Outstanding Salary A/C. right??

 

Salary A/C,being a nominal accont has to be debited in this case by applying the golden rules of Accounting.that is debit all expenses and lossess and credit gains or profits (Rule of 'Nominal Account).

I think salary outstanding Account is definitely a personal áccount.I think I am right in this point.If it is so ,won't it be practicable to apply the rule of a personal account that is debit the receiver and credit the giver.

in the situation that I have mentioned above,salary outstanding account is credited.According to the rule of a personal account credit must be given to the " giver    ".how it is possible in the given case.I mean there is no giver in this situation.

or the credit is only on the basis of a liability that the account represents???

this is my doubt.Somebody please answer.thanks in advance