Question

State whether the following statement is True or False. 

Outstanding expenses are shown on the liability side of the Balance Sheet.

Options

• True

• False

Answer 1

True

Explanation: The expenses that have been incurred during the current year but have been left unpaid until the date of preparation of final accounts are called outstanding expenses. These are shown on the Liabilities side of the Balance Sheet. So, outstanding expenses represent a firm’s obligations.