Distinguish between outstanding expenses and prepaired expenses.

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answered Jun 20, 2022 by AnweshaGhosh (45.0k points)
selected Jun 21, 2022 by ChinmaySonje

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Difference Between Outstanding Expenses and Prepaired Expenses:

Outstanding Expenses	Prepaired Expenses
1. These are those expenses for which services had been received but not paid till the last accounting period or preparation of final accounts.	1. These are those expenses for which services had not been received but are paid well in advance.
2. These expenses are shown at the debit of Trading or Profit and Loss Account by Adding them to the concerned expense.	2. These expenses are shown at the credit of trading or profit and loss account by deducting them from the concerned expense.
3. Outstanding expenses are shown at the liabilities side of the Balance Sheet.	3. Prepaid expenses are shown at the Assets side of the Balance Sheet.
4. Outstanding Expenses are concerned with the current financial year i.e., for which final accounts are prepared.	4. Prepaid expenses are concerned with the next Financial years i.e., the year following the year for which final accounts are prepared.