Accrued Expenses
Accrued expenses are expenses that have already been incurred but not yet paid. Typical expenses that accrue include a variety of things like wages, insurance, rents, taxes,dividends, litigation costs that have already been incurred but not yet paid.
FYI:
Accounts payable / creditors and accrued expenses / accruals are almost the same thing but they have a very practical difference. Account payable / creditors arise when you take credit from your suppliers. Accrued expenses also represent the amounts owed to suppliers. The difference between them is whether or not the business has received the invoice before the date of the balance sheet. For example, a product is delivered to the warehouse on the last day of the accounting year and is accepted by the warehouse staff. The invoice is likely to take some time to reach the accounting department. In the meantime, the accounting staff estimates the relevant amount and put it into accrued expenses. When the invoice is received it will be transferred to account payable / creditors.
