What does "Journal entry for outstanding expenses | Example" cover?

Journal entry for outstanding expenses are very simple to remember but the application of golden rules of accounting on it is difficult because the Personal…

Who is this guide meant for?

Class 11 and Class 12 commerce students, and CA Foundation aspirants, studying Financial Accounting.

Can I test myself on "Journal entry for outstanding expenses | Example"?

Yes — this page includes a short interactive quiz so you can check your understanding straight away.

Journal entry for outstanding expenses | Example

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Quick Overview & Key Takeaways

Focus Topic:Journal entry for outstanding expenses | Example

Estimated Reading Time:8 mins

Journal entry for outstanding expenses are very simple to remember but the application of golden rules of accounting on it is difficult because the Personal…
Syllabus-aligned study material with detailed definitions, formats, and practical examples.
Interactive check: Includes a custom practice quiz at the bottom of the article to self-evaluate knowledge.

Journal

golden rules of accounting

What is Outstanding Expense?

Example:

Salary and Wages due for the month but not paid.
Rent due for the office building but not paid.
Electricity charges due but not paid.
Auditor Fee due but not paid.

Why do we need to maintain an outstanding expenses account?

Accrual Accounting Principle principle of accounting

Journal entry for outstanding expenses with the golden rule:

Example of Journal entry for creating outstanding expenses with the golden rule:

Salary for the Month of Jan-18 Rs 50,000 due but not paid yetThe first account is Salaries A/c,

Name of Account	Type of Account	The rule will be Applied	Effect of a transaction on accounts	Condition of Rule applied	According to Rule, It will be Dr./Cr.
Salaries	Expense	Nominal Account	Availing services from employees	All Expenses and losses	Debit

The second account isOutstanding Salary A/c Explanation of the personal rule: there are three types of persons

Natural Person: It means made by Nature like Mr Ram, Mr sham, Mrs Sita, Miss Gita, etc.
Artificial Person: It means made by the law like Ram & Sons Ltd., HAPPSS Store Ltd., Amazon India Pvt. Ltd., etc.
Representative Person: It means the Representative of a natural person or group of persons. Like: Outstanding expenses a/c represents the individual or group of persons whose amount of expenses is not paid yet to them.

Particulars	Debit	Credit
Salaries a/c Dr.	50,000
To Outstanding Salaries a/c		50,000
(Being salaries due for the month of Jan-18 but not paid yet)

Name of Account	Type of Account	The rule will be Applied	Effect of a transaction on accounts	Condition of Rule applied	According to Rule, It will be Dr./Cr.
Outstanding Salaries	Representative Person	Personal Rule	Amount of salaries received by the group of employees	Receiver	Debit
Cash	Assets	Assets Rule	cash paid	Goes out	Credit

Particulars	Debit	Credit
Outstanding Salaries a/c Dr.	50,000
To Cash a/c		50,000
(Being outstanding salaries paid)

Particulars	Debit	Credit
Salaries a/c Dr.	50,000
To Outstanding Salaries a/c		50,000
(Being salaries due for the month of Jan-18 but not paid yet)

Name of Account	Type of Account	The rule will be Applied	Effect of a transaction on accounts	Condition of Rule applied	According to Rule, It will be Dr./Cr.
Outstanding Salaries	liability	liabilities Rule	Amount of salaries received by the group of employees	Decrease in liability	Debit
Cash	Assets	Assets Rule	cash paid	Decrease in Asset	Credit

Journal entry for outstanding expenses | Example

Quick Overview & Key Takeaways

What is Outstanding Expense?

Why do we need to maintain an outstanding expenses account?

Journal entry for outstanding expenses with the golden rule:

Example of Journal entry for creating outstanding expenses with the golden rule:

We can understand it step by step:

Journal entry for repaying the liability of outstanding expenses:

Example: -

Journal entry for outstanding expenses with modern rules.

Example Journal entry for creating outstanding expenses with modern rules:

Journal entry for repaying the liability of outstanding expenses:

Example: -

Sarbjit SinghB.Com and M.Com

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