Accrued Expense Definition

An accrued expense is an accounting term that refers to an expense that is recognized on the books before it has been paid; the expense is recorded in the accounting period in which it is incurred.. Because accrued expenses represent a company’s obligation to make future cash payments, they are shown on a company’s balance sheet as current liabilities; accrued expenses are also known as accrued liabilities. An accrued expense is only an estimate, and will likely differ from the supplier’s invoice that will arrive at a later date.