Personal rule related

A/c entries 525 views 1 replies

Dinesh More

Accountant

24 Points Joined June 2012

why oustanding salary / wages are personal account ?

please explain me.

Replies (1)

Guest

If a business is not able to pay salary for the last two
months to all the workers or some of them the workers will
be treated as the creditors of the business(since they have
given the services but in exchange they have not been paid
for). The amount due to these employees will be added and
put under one common title "Salaries Outstanding account".

Thus the salary outstanding account is a personnal account
representing the employees.