Question

Outstanding wages appears in the trial balance taken only in

• A. Trading account
• B. Profit and loss account
• C. Asset side of balance sheet
• D. Liability side of balance sheet

Answer 1

Answer:

D. Liability side of balance sheet

Outstanding wages are wages incurred but not yet paid by the business at the end of the accounting period. They represent an obligation to pay, so they are a liability. They do not appear in the Trading or Profit & Loss Account directly, but when preparing the Profit & Loss Account, they are added to the wages/expenses to calculate total expenses.