If outstanding wages appears in trial balance, while preparing the final accounts it will be shown in/or ____________.

Profit & Loss A/c and asset side of balance sheet

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Profit & Loss A/c and liability side of balance sheet

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Asset side of balance sheet

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Liability side of balance sheet

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Solution

The correct option is C Liability side of balance sheet
An adjustment entry need to be passed in books of account before finalizing the financial accounts of the business for all the adjustments.
For outstanding wages, following accounting entry will be passed:

Wages A/c Dr.
To Outstanding wages A/c

If an adjustment entry is already passed, this will increase the amount of wages appearing in trial balance and outstanding wages account will also appears in the trial balance.

Hence, if outstanding wages appears in trial balance, this will be shown in the liability side of the balance sheet.

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