Accrued Expenses
Accounting glossary · Understand, connect, apply
Accrued expenses are costs already incurred but not yet paid or fully recorded. They normally require an expense and a corresponding liability.
Example
At month-end, $200 of electricity has been used but not billed. Debit Utilities Expense and credit an accrued payable.
Remember the difference
The expense belongs to the period of consumption, not automatically the period in which the bill arrives.
Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.
Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.
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