Define Accrued liability. What type of entry usually reflects and accrued liability?
An accrued liability is an expense that was incurred before the end of the current period but has not been paid or recorded. Therefore, an accrued liability is recognized when such a transaction is recorded. A typical example is wages incurred during the last few days of the accounting period but not recorded because no payroll was prepared and paid that included these wages. Assuming wages of $2,000 were incurred, the adjusting entry to record the accrued liability and the wage expense would be as follows:
December 31:
Wage expense (+E, -SE).......................................... 2,000
Wages payable (+L) ......................................... 2,000
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