Journal Entry for Outstanding Expenses
Outstanding expenses are those expenses which are due but not yet paid. It acts like a liability and considers the rules “credit the increase in liability” and “debit the decrease in expenses” (modern approach).
The journal entry for outstanding expenses involves two accounts: outstanding expense a/c and expense a/c.
|To Outstanding Expense A/C|| Credit
Let’s assume that in March there were 30,000 due to be paid for rent which weren’t paid due to some reason. In March, the company will record this into their books with journal entry
|To Outstanding Rent A/C||30,000|