Definition of Accrued liability:
Debt, expense, or obligation incurred in an accounting period but chargeable or payable in another.
An accrued liability is an expense that a business has incurred but has not yet paid. A company can accrue liabilities for any number of obligations, and the accruals can be recorded as either short-term or long-term liabilities on a company's balance sheet. Payroll taxes, including Social Security, Medicare, and federal unemployment taxes are liabilities that can be accrued periodically in preparation for payment before the taxes are due.
An accrued liability is a financial obligation a company incurs during a given period but has not yet paid for in that period. Although the cash flow has yet to occur, the company must still pay for the benefit received. Accrued liabilities only exist when using an accrual method of accounting.
How to use Accrued liability in a sentence?
- An accrued liability occurs when a business has incurred an expense but has not yet paid it out.
- Accrued liabilities only exist when using an accrual method of accounting.
- Accrued liabilities arise due to events that occur during the normal course of business.
- Examples of accrued liabilities can include payroll and payroll taxes.
Meaning of Accrued liability & Accrued liability Definition