Accrued expenses are an important part of any business, as they are expenses that have been incurred but not yet paid. In the official business definition, accrued expenses are considered a current liability, meaning that they are due to be paid within one year. Accrued expenses are usually incurred through services rendered or goods received, but not yet invoiced or paid for. Examples of accrued expenses include wages, taxes, interest, and utilities. Accrued expenses are recorded as liabilities on the balance sheet and are reported as expenses on the income statement. Accrued expenses are important to track, as they are a reflection of the company’s current financial obligations. It is important to note that accrued expenses are not the same as accounts payable, which are expenses that have been invoiced and are due to be paid in the future.
