Accrued expenses are costs that have been incurred but not yet paid for by the business. These are expenses that are recognized in the financial statements before the actual payment is made. The journal entry for an accrued expense typically involves increasing the expense account and recognizing a liability.
Accrued Expenses Journal Entry
Journal Entry:
Example 1:
Wages of ₹10,000 were accrued in the month of December. Record the necessary journal entry.
Solution:
Example 2:
Rent paid ₹50,000 for ten months but the rent of two months i.e. ₹10,000 remains accrued. Record the necessary journal entry.