Accrued Expense

An accrued expense is an expense incurred but not yet paid by the end of the period.

Accrued expenses are recognized as liabilities to reflect obligations for costs already incurred, such as accrued salaries or utilities.

- Used in day-to-day bookkeeping and journal entries to record transactions correctly.
- Used when preparing trial balances and reconciling accounts.

- Example: Accountants use **Accrued Expense** when recording transactions and preparing the trial balance.

- Why it matters: Ensures accurate records, supports reliable reporting, and reduces posting and reconciliation errors.