Accrued expense definition
Accrued expense definition, Accrued expense and outstanding expense are both terms relate to expenses that are incur but not yet paid. However, there is a difference between the two terms:
Accrued expense
An accrued expense is an expense that has been generate but not yet paid, and has not been record in the company’s accounting records. Accrued expenses are recognize in the accounting records as a liability, and the amount is estimate based on the amount of work completed or services provided. Examples of accrued expenses include salaries and wages, interest, and rent.
Outstanding expense
An outstanding expense is an expense that has been incur but not yet paid, and is recognize as a liability in the books of accounts. This type of expense is recorded at the end of the accounting period to ensure that it is recognize in the correct period and accurately reflects the financial position of the company. Examples of outstanding expenses include outstanding rent, outstanding salaries and wages, and outstanding interest.
To put it simply, the key distinction between an accrued expense and an outstanding expense is that the former refers to an expense that has been incur but not yet recorded in the company’s accounting records, whereas an outstanding expense is an expense that has been incur and record in the books of accounts but not yet paid. Accrued expense definition
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