Accrued Expense

Adjustments at the Balance Date and Preparation of Sole Proprietorship Financial Statements

MS: Belanja Terakru · EN: Accrued Expense · ZH: 应计费用

Meaning

An accrued expense is an expense that has been incurred during the accounting period but has not yet been paid by the balance date. It is added to the relevant expense in the Income Statement and shown as a current liability in the Statement of Financial Position. This adjustment ensures the full expense of the period is recorded even though cash has not gone out.

Example

Sinar Jaya Motor Workshop still owes RM300 for December's electricity bill on 31 December. Entry: Debit Electricity Expense RM300, Credit Accrued Electricity RM300, and the RM300 is reported as a current liability.

Source: DSKP KSSM Prinsip Perakaunan Tingkatan 4

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