What are Accrued Expenses?
Accrued Expenses (Definition)
Accrued expenses are expenses that have been incurred but have not yet been paid. They are short-term or current commitments that appear on your company's balance sheet and general ledger and can also be referred to as "accrued liabilities" and "spontaneous liabilities". An example of an accrued expense is a major repair that occurs in the final month of the accounting year but is not paid until the bill is received in the first month of the following year.
Other accrued expenses may include bonuses, compensation, or salary that is yet to be paid, vacation time unpaid, refunds and repairs that must be paid in future, interest payable on debts and loans, bills that won’t be invoiced for another month, such as an electricity bill.