Accrued Expense
An accounting expense recognized in the books before it is paid for. It is a liability, ans is usually current. These expenses are typically periodic and documented on a company's balance sheet due to the high probability that they will be collected. Investopedia Says:
Accrued expenses are the opposite of prepaid expenses. Firms will typically incur periodic expenses such as wages, interest and taxes. Even though they are to be paid at some future date, they are indicated on the firm's balance sheet from when the firm can reasonably expect their payment, until the time they are paid.
An example would be accruing interest that is building up on a bank loan. Related Terms:
Accrual Accounting
Accrued Income
Accrued Interest
Trade Date Accounting |