Accrued Expenses represent obligations for goods or services that a company has received but has not yet paid for by the end of an accounting period. For example, if a company receives services from a vendor in December but pays for them in January, the expense will be recorded as an accrued expense in December, aligning with the matching principle of accounting.

On the Balance Sheet, accrued expenses are shown as a current liability, reflecting their short-term nature. Common examples of accrued expenses include wages payable, utilities payable, and interest payable. For instance, if employees have worked for the final days of a month but not yet received their salaries by the month's end, the corresponding wages are treated as accrued expenses.

In practice, tracking accrued expenses is vital for accurate financial reporting and for ensuring a company's expenses are matched with its revenues in the correct accounting period. Proper recording of accrued expenses also facilitates month-end close processes by ensuring all liabilities are accounted for.