Author Topic: What's the difference between accrued expenses and accounts payable?  (Read 191 times)

Offline Repon

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What's the difference between accrued expenses and accounts payable?

Accrued expenses are payments that a company is obligated to pay in the future for which goods and services have already been delivered. These types of expenses are realized on the balance sheet and are usually current liabilities. The accrued liabilities are adjusted and recognized on the balance sheet at the end of each accounting period; adjustments are used to document goods and services that have been delivered but not yet billed. An example of an accrued expense would be a case where a company uses utilities for the month but has not yet been sent an invoice before the end of the period, when it has to close the books.

Accounts payable are a company's ongoing expenses that are typically short-term debts that must be paid off in a specified period to avoid default. They are considered to be current liabilities because the payment is usually due within one year of the date of the transaction. Accounts payable is the total amount of debt the company has to pay to its creditors for goods or services bought on credit. On the other hand, accrued expenses is the total liability that is payable for goods and services that have been received but not been billed. Accounts payable are recognized on the balance sheet when the company buys goods or services on credit. Accrued expenses are realized on the balance sheet at the end of a company's accounting period, when they are recognized by adjusting journal entries in the company's ledger.


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Department of Business Administration
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Daffodil International University

Offline ummekulsum

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Re: What's the difference between accrued expenses and accounts payable?
« Reply #1 on: April 09, 2017, 06:11:10 PM »
More informative for adjusting the entry..

Offline Repon

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Re: What's the difference between accrued expenses and accounts payable?
« Reply #2 on: April 11, 2017, 07:13:39 PM »
You're right
Senior Lecturer in Accounting
Department of Business Administration
Faculty of Business & Economics
Daffodil International University