Accrued Expense
An accrued expense records a cost already incurred but not yet paid or invoiced, matching the expense and related liability to the correct reporting period.
Expense and interest accruals recognized before cash settlement, including cutoff, estimation, journal entries, and clearing.
Accrual accounting records economic activity in the period it occurs, even when cash moves later. Accrued Expense covers unbilled wages, utilities, services, and similar costs; Accrued Interest applies the same timing principle to loans and fixed-income instruments.
The strongest evidence is transaction-specific: service dates, receiving records, payroll data, principal balances, rates, day-count conventions, and subsequent invoices or payments. Reviewers should also confirm that each accrual is reversed or cleared without duplicating expense.
An accrual is not automatically an estimate chosen to smooth profit. It must be tied to a cost or financing return already incurred, measured from supportable information, and updated when better evidence becomes available.
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An accrued expense records a cost already incurred but not yet paid or invoiced, matching the expense and related liability to the correct reporting period.
Accrued interest is interest earned or incurred since the last payment date but not yet paid, affecting loan accounting and bond settlement prices.