What is the Journal Entry for Outstanding Expenses?

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). Below is the journal entry for outstanding expenses;

It involves two accounts: Outstanding Expense A/C and Expense A/C

 Expense A/C  Debit
   To Outstanding Expense A/C  Credit

 

Example

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

 Rent A/C  30,000
   To Outstanding Rent A/C  30,000

 

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