Financial Glossary
Accrued Expenses Journal Entry
An accrued expenses journal entry is the bookkeeping record used to recognize an expense that a business has incurred but has not yet paid or been billed for. Under accrual accounting, it debits the relevant expense account and credits an accrued liabilities (or accrued expenses payable) account at period end. When the bill is later paid, a second entry reverses the liability and reduces cash.
Problem & Application
Owner-operated businesses, STR hosts, and campground operators often incur costs such as utilities, wages, interest, or vendor services in one period but settle them in the next. Without an accruing entry, a month or quarter can look more profitable than it actually was, distorting margins and cash planning. Recording the accrual keeps the income statement matched to the period the cost belongs to and prevents surprise liabilities from being missed at close.
In Short
Accrued expense entries are a core part of an accurate monthly close and the matching principle. Booking them consistently keeps financial statements reliable for decisions, lenders, and tax prep.