Are accrued expenses assets or liabilities?

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Creviston 0 Comments

If a company has accrued expenses, does it record it as an asset or a liability? What about the maturity profile?

2 Answers

score 0 · Answer 1 · 2012-12-02T23:02:21+00:00

Accrued expenses are liabilities. When you recognize an accrual, you debit your income statement (the related expense) and you credit your liabilities. By posting this journal, you essentially recognize that you have consumed and used services for which invoices (or any other related document) were not received at your reporting date.

score 0 · Answer 2 · 2013-05-06T21:25:39+00:00

Accrued expenses are expenses that have been incurred but they are not yet invoiced. They are therefore liabilities and not assets. On the other hand, the prepaid expenses are expenses that have been paid but the service has not been provided yet. The prepaid expenses are therefore assets.