# Accrued Expense

*Accounting & Reporting — Finicade finance glossary*

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.

**Also known as:** accruals, accrued liabilities

**Related terms:** [Prepaid Expense](https://finicade.com/glossary/prepaid-expense), [Accrual Accounting](https://finicade.com/glossary/accrual-accounting), [Matching Principle](https://finicade.com/glossary/matching-principle), [Journal Entry](https://finicade.com/glossary/journal-entry), [Working Capital](https://finicade.com/glossary/working-capital)

Source: https://finicade.com/glossary/accrued-expense