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(a) Cash A/c
(b) Salaries A/c
(c) Outstanding Salaries A/c
(d) None
i think the correct answer is " Salary Payable" .... thanks for adding good question
c) Outstanding Salary A/c - will be credited.
The reason stated below:
When Salary is due & to be paid to employee means its outstanding Salary & Payable. Its liabilities for company.
The Original entry is required to pass on the end of month or Due date; such as:
Salary A/c Dr $50,00
To Salary Payable / Outstanding Salary. ( Cr) $50,00
Salary is not yet paid so the entry will be
Debit - Salary Expenses
Credit - Outstanding Salaries A/c or Salary Payable
It depends:
Case 1: Cash Payment immediately:
Debit: Salary Expenses
Credit: Cash
Case 2: Payable later:
Debit: Salary Expenses
Credit: Payable Salaries
---------
Debit: Payable Salaries
Credit: Cash/Bank
Regards,
Mohammad
Salaries A/c
Outstanding Salaries A/c
( Maturity entry)
___________
Outstanding Salaries A/c
Cash A/c Or bank A/c
( Payment entry )
C is the option outstanding salary a/c
To record this transaction in the books of account, the journal entry to be passed:
Salaries Expenses...................Debit
Salaries payable/Outstanding Salaries A/C........................Credit
So the right answer to this question is options-(C) Outstanding Salaries A/C.
Option C is right answer as Salary payable would create liability for employer to make payment in future
if salary is paid cash is to be credit and if it is not paid at current period outstanding salaries is to be credit