Answer Posted / dhan govinda baruah

In the last month of the current financial year i,e. in March,journal entry will be:

(1) SALARY A/C Dr
To Mr. X's A/C
(Being salary payable to Mr. X.)

(2) Mr. X's A/C Dr
To OUTSTANDING SALARY A/C
(Being o/s salary c/f to Balance Sheet)

While salary paid in the next financial year (in April) the journal entry will be:

(3) OUTSTANDING SALARY A/C Dr
To CASH/BANK A/C
(Being outstanding salary amount made clear)

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