Explore commonly used personal finance terms.
An accrued liability is an expense that has been incurred but not yet paid by a business, such as wages owed or interest payable. Accrued liabilities are recorded on the balance sheet as current liabilities, reflecting the company’s obligations that need to be settled. This practice is part of the accrual accounting system, where expenses are recorded when incurred, not when paid. Accrued liabilities provide a clearer picture of a company’s financial health and obligations, making them essential for accurate financial reporting.
