What Is An Example of An Accrued Expense.An accrued expense is an expense that a company has incurred but has not yet paid. It is recorded as a liability on the company’s balance sheet until the payment is made.
What Is An Example of An Accrued Expense.
A common example of an accrued expense is wages or salaries that have been earned by employees but have not yet been paid at the end of an accounting period. The company would record the wages or salaries as an accrued expense and a liability on its balance sheet until the payment is made to the employees.
Another example of an accrued expense is interest on a loan. If a company has a loan with a fixed interest rate, the interest expense is accrued over the period of the loan and recorded as a liability on the company’s balance sheet until the payment is made to the lender.
Accrued liabilities – Eng. Accrued Liability , an accounting term for expenses that are incurred in a business but have not yet been paid. The company can accrue liabilities for many items, such as the payment of personal pensions to employees, which will be paid to pensioners in the future. Accrued liabilities can be recorded in the balance sheet both short-term and long-term.
Payroll taxes are another example of accrued liabilities. The employer is responsible for making social security payments, health insurance payments, and transfers to the unemployment insurance fund. The employer accumulates this money until the date when the money must be transferred to the relevant state authorities. Until these payments are made, they are accrued liabilities. Thus, accrued liabilities do not always mean late payment.
