CBSE · Class 11 · Accountancy · Financial Statements - IIOutstanding salary is added to salary in Profit and Loss Account and shown as:
Step-by-Step Solution
Outstanding salary represents a liability for the business and is shown on the liability side of the Balance Sheet.
Detailed Options Breakdown
Option : An asset in Balance Sheet
Incorrect choice. This distractor represents a common misunderstanding of the core principles of Financial Statements - II.
Option 1: A liability in Balance Sheet (Correct Answer)
Correct choice. Refer to the step-by-step verified solution guidelines above for details.
Option 2: An income in Profit and Loss Account
Incorrect choice. This distractor represents a common misunderstanding of the core principles of Financial Statements - II.
Option 3: Capital in Balance Sheet
Incorrect choice. This distractor represents a common misunderstanding of the core principles of Financial Statements - II.
💡 Study Guide: This question tests core syllabus concepts from Financial Statements - II. For formulas, key summaries, and mock exam reference guides, read the full Financial Statements - II Revision Notes.