Examples of Accrued Expenses
Some common examples of accrued expenses include:
1. Salaries and Wages: If a company’s pay period ends on the last day of the month, but employees are not paid until the following month, this would be recorded under accrued expenses for salary and wages.
2. Interest Expense: If a company has a loan with an interest payment due at the end of each quarter, the accrued interest expense would need to be recorded before payment is made.
3. Utilities: If a company receives an electricity bill at the end of the month but has not yet made the payment, the accrued expenses for utilities would need to be recorded.
4. Rent: If a company has a lease agreement that requires monthly rent payment, but payment is made at the beginning of the following month, the accrued rent expenses would be recognised.
5. Taxes: Taxes, such as property taxes or income taxes, that are incurred but not yet billed.