Accrued Expenses

Accrued expenses are costs a company has incurred during a period but hasn't yet paid or recorded in the accounts by the period’s end. These are financial obligations for goods or services received, like electricity bills or wages, that will be paid later. Recognizing accrued expenses ensures the company’s financial statements accurately reflect its liabilities and expenses for that period, providing a true picture of its financial position. Essentially, it’s an acknowledgment of expenses that have accumulated but are not yet settled in cash.