Outstanding salaries is shown as
A)An Asset in the Balance Sheet
B)A Liability
C)By adjusting it in the P & L A/c
D)Both (b) and (c) above

Question

Quizplus · Accepted Answer

Outstanding salaries are considered a liability because the company owes these amounts to its employees. Therefore, it is shown as a liability in the balance sheet. Additionally, outstanding salaries are also adjusted in the Profit & Loss Account (P & L A/c) as an expense, affecting the net income. Thus, both (b) and (c) are correct.

Outstanding Salaries Is Shown as