Question

The adjustment to be made for outstanding expenses is ________________________.

• A. Add outstanding expenses to respective expenses and show it as asset
• B. Deduct outstanding expenses from respective expenses and show it as liability
• C. Add outstanding expenses to respective expenses and show it as liability
• D. Deduct outstanding expenses from respective expenses and show it as asset

Answer 1

Answer: (C)

Add outstanding expenses to respective expenses and show it as liability

Outstanding expenses which are liability account must be recorded in the accounting period, if they relate to the accounting year.