![]() Following the accrual method of accounting, expenses are recognized when they are incurred, not necessarily when they are paid. An accrued expense can be an estimate and differ from the supplier’s invoice that will arrive at a later date. Types of Expenses in a Budget An expense is an amount you part with for products and services that you use each day. Since accrued expenses represent a company's obligation to make future cash payments, they are shown on a company's balance sheet as current liabilities. Periodic expenses typically occur irregularly instead of on a monthly basis.
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