Question

Outstanding expenses are recorded on the __________ side of the balance sheet.

• A. asset
• B. liability
• C. debit
• D. none of the above

Answer 1

The correct option is B liability

Expenses which are due but not paid are called outstanding expenses. More simply, the expense against which the services are already taken but the payment is not done.

Accounting entry for outstanding expenses will be:

Expense A/c Dr.

To Outstanding expense A/c

The amount of outstanding expenses will be added to the respective expense and to be shown as current liability in the balance sheet.