what are accrued expenses 
accrued expenses also known as accrued liabilities are those expenses recognized on the books before they have been paid the expenses are recorded in the accounting period in which they are incurred accrual accounting is the preferred accounting method of generally accepted accounting principles gaap understanding accrued expensessince accrued expenses represent a company s obligation to make future cash payments they are shown on a company s balance sheet as current liabilities an accrued expense can be an estimate and differ from the supplier s invoice which will arrive at a later date following the accrual method of accounting expenses are recognized when they are incurred not necessarily when they are paid an example of an accrued expense is when a company purchases supplies from a vendor but has not yet received an invoice for the purchase other forms of accrued expenses include interest payments on loans warranties on products or services received and taxes all of which have been incurred or obtained but for which no invoices have been received nor payments made employee commissions wages and bonuses are accrued in the period when they occur although the actual payment is made in the following period 