Accrued expenses definition including break down of areas in the definition. Analyzing the definition of key term often provides more insight about concepts. The term accrued expenses can be defined as: Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses involve increasing expenses and increasing liabilities. Accrued expenses are those that have been incurred but have not been recorded or paid as of the cutoff date. Wages payable is a common example of accrued expense because the process of paying wages is usually best set up on more of a cash basis with the plan of adjusting at the end of the period. The accrued expense adjustment would be a debit to wages expense for the amount of work done before the cutoff that has not yet been paid and a credit to wages payable. Loan interest can be an example of accrued expense because we may have interest owed that is not due to be paid until after the cutoff. Taxes payable can be another example of accrued expenses.
