Accrued Expenses
Multiple expenses that have been incurred but not yet paid, such as wages, interest, and utilities, requiring recognition in current financial statements.
Accrued Expenses
The plural form of accrued expense, representing multiple expenses that have been incurred but not yet paid, such as wages, interest, taxes, and utilities.
For instance, at month-end, a company might record accrued expenses for $5,000 in unpaid utilities, $15,000 in employee bonuses earned but not yet paid, and $2,000 in interest on loans that has accumulated but isn’t due until the following month.
Accrued expenses are reversed when the actual invoices are received and processed, converting the estimated accrual into an accounts payable. Accurate estimation of accruals requires historical data, careful analysis, and professional judgment to ensure financial statements fairly represent the company’s obligations.