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Horngren'S Financial And Managerial Accounting
Found in: Page 157

Short Answer

What is an accrued expense? Provide an example.

Accrued expense is the expense that is incurred but remains unpaid as of date. Example: Unpaid wages of the employees.

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Step by Step Solution

Step-by-Step SolutionStep 1: Explanation of Expense

Expense refers to the cost of availing of the services or goods. It is incurred in normal business operations.

Step 2: Treatment of Accrued Expense

Accrued expenses are shown in the income statement and are also reported as a current liability on the balance sheet.

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