Accrued Expense
Also called: accruals, accrued liabilities
An accrued expense is a cost incurred but not yet paid or invoiced — wages earned in the last week of the month, interest building on a loan, utilities used. Recording it keeps the period's profit honest. Accruals are also estimates, which makes them a favoured lever for smoothing earnings: under-accruing lifts this period's profit and borrows from the next.