Accounting Equation of Salary Outstanding:

Salary outstanding refers to the amount of salary owed to an employee for work done but not yet paid. It is a liability for the company until it is paid. The accounting equation for salary outstanding can be expressed as follows:

Assets = Liabilities + Equity

Where:

Assets: Refers to the resources owned by the company. In this case, it could be cash in hand, bank balance, or any other asset that the company owns.

Liabilities: Refers to the debts owed by the company. In this case, it would be the unpaid salary owed to the employee.

Equity: Refers to the residual interest in the assets of the company after deducting liabilities. It is the owners' claim on the assets of the company.

Therefore, the accounting equation for salary outstanding of ₹2000 can be expressed as:

Assets = Liabilities + Equity
Cash/Bank + ₹2000 = Salary Payable + Owner's Equity

The above equation shows that the company's assets will decrease by ₹2000 as it has to pay the outstanding salary. The liability of the company will increase by ₹2000, and the owner's equity will remain the same.

To summarize, the accounting equation for salary outstanding is a key tool for tracking and managing a company's finances. It helps to ensure that the company's assets and liabilities are balanced while providing an accurate picture of the company's financial health.

Subtracted from capital
and addition of new heading SALARY OUTSTANDING