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Answer» 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. |
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