Journal Entry of Outstanding salary and Prepaid Salary In Accounting
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Journal Entry of Salary outstanding expense
Salary paid for the month of Jan Rs 5,000 actual salary Rs 10,000
Journal Entry for the same will be.
Salary A/c Dr. 10,000
To cash A/c 5,000
To salary payable A/c 5000
Credit liability as Liability ADD
(being salary paid and payable salary)
Now in the month of Feb, the adjustment of salary will be made.
Salary A/c Dr. 10,000
Outstanding salary A/c Dr. 5,000
To cash A/c 15,000
(being salary paid off last month salary)
Debit liability to deduct liability – from the business.
Journal Entry of Salay Prepaid expense
Salary paid for the month of Jan Rs 15,000 actual salary Rs 10,000
Journal Entry for the same will be.
Prepaid Salary A/c Dr. 5,000
Salary A/c Dr 10,000
To cash A/c 15,000
Debit Asset to ADD Asset + from business
(being salary paid with advance salary)
Now in the month of Feb, the adjustment of salary will be made.
Salary A/c Dr. 10,000
To cash A/c 5000
To Prepaid Salary A/c 5000
(being salary paid and adjustment of last month salary)
Credit Asset to deduct Asset – from business
Outstanding and prepaid salary in balance sheet
Outstanding salary is liability therefore it will be shown in the liability Balance sheet.
Prepaid salary is liability therefore it will be shown in the Prepaid Balance sheet.
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Liability | Amount | Assets | Amount |
Outstanding Expense | | | |
Liability | Amount | Assets | Amount |
| | Prepaid Expense | |