Natalia Alva In: Category - Journal EntriesWhat is the journal entry for outstanding salary?journal entryoutstanding salary ShareFacebook1 AnswerVotedRecent Dheeraj 2020-08-01T23:09:42+05:30Added an answer on August 1, 2020 at 11:09 pm This answer was edited. Outstanding SalaryExample- Company A Ltd pays their employees a monthly salary of 25,000. The company has a policy that it pays the previous month salary to its employees on 10th of next month. Salary for March is due and is duly to be paid by the 10th of April as per the company policy. Journalise the following transaction for salary due and paid in the books of ABC and Co. In the Books of ABC and Co.DateParticularsL.F.AmountNature of AccountAccounting Rule31st MarchSalary a/c Dr25,000NominalDebit- All Expense and Losses To Outstanding Salary a/c 25,000Representative PersonalCredit- The Giver(Being salary due for March)DateParticularsL.F.AmountNature of AccountAccounting Rule1st AprilOutstanding Salary a/c Dr25,000Representative PersonalDebit- The Receiver To Cash/Bank a/c 25,000RealCredit- What goes out of the business(Being salary paid)Accounting TreatmentOutstanding salary is added to the salary and shown on the debit side of profit and loss account. It is further shown under the head current liabilities in the balance sheet. Outstanding salary is also known as Salary due (or) Salary payable.Modern Accounting ApproachWe will record the same transaction by following the modern rules of accounting In the Books of ABC and Co.DateParticularsL.F.AmountNature of AccountAccounting Rule31st MarchSalary a/c Dr25,000ExpenseDebit- The Increase in Expense To Outstanding Salary a/c 25,000LiabilityCredit- The Increase in Liability(Being salary due for March)DateParticularsL.F.AmountNature of AccountAccounting Rule1st AprilOutstanding Salary a/c Dr25,000LiabilityDebit- The Decrease in Liability To Cash/Bank a/c 25,000AssetCredit- The Decrease in Asset(Being salary paid)0Reply Share ShareShare on FacebookShare on TwitterShare on LinkedInShare on WhatsAppLeave an answerCancel replyYou must login or register to add a new answer.