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Accounting & Tax vocabulary · Assets, Liabilities & Equity

Accrued expense

Meaning in accounting & tax, with examples

nounCommon term

In accounting & tax, accrued expense means: A cost that belongs to a period but has not yet been invoiced or paid, recorded as an expense and a liability so the period shows its true cost.

In Turkish: gider tahakkuku, tahakkuk etmiş gider

How it is used

Typical examples are utilities, interest, bonuses and professional fees. In British English they are usually just called accruals. They are reversed when the real invoice arrives.

Example sentences

  1. Accrued expenses include the December electricity bill, which we only receive in January.

  2. Please book an accrued expense for the audit fee.

Common collocations

  • accrued liabilities
  • accrued interest
  • book an accrued expense
  • reverse an accrual
  • accrualAn amount recorded in the period it belongs to, even though cash has not yet been paid or received, such as a utility bill that only arrives next month.
  • prepaid expenseA payment made in advance for goods or services that will be used in a later period, such as a year's insurance, recorded first as an asset.
  • current liabilityA debt or obligation that a company must pay within one year, such as supplier invoices, short-term loans, taxes payable and unpaid salaries.
  • month-end closeThe set of tasks accountants complete after each month ends, such as posting accruals and reconciling accounts, so that the month's results are final.

More terms: Assets, Liabilities & Equity

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This page explains English vocabulary for learners. It is not financial advice.