Ex;For Accrued Expenses and how it will be treated?

Best way in which it can be explained is "service received in advance and cash yet to be paid".

Accrued Expenses are the expenses which are incurred but yet not paid, it will be shown under current liability under liability side of a balance Sheet.

For Ex. if we are staying in a building for 1 month and yet not paid rent then at the end of the month that rent will be accrued rent and shown under liability side.

Primary examples of accrued expenses are salaries payable and interest payable. Salaries payable are wages earned by employees in one accounting period but not paid until the next, while interest payable is interest expense that has been incurred but not yet paid. Treatment accrued expenses add with expense( debit) with p& L and show liability side of B/S ( Current liability)

It will be Interest Expense (Debit) Interest Payable Liability (Credit) To record the amount accured as per matching principle.

Accounting treatment

 

Interest Expense_________Debit

   Interest Payable _____________Credit