• Refers to costs that are incurred in a period but are both unpaid and unrecorded. Accrued expense must be reported on the income statement of the period When incurred adjusting entries for recording accrued expense involved increasing expense and increasing liability. This adjustment recognizes expenses incurred in a period but not yet paid. Common examples of accrued expenses are salaries, interest, rent, and taxes. When you use salaries and interest to show how to adjust account for accrued expenses
o Step one
o Record how much was earned
o Record salary expense and salary, payable
• Companies, we have accrued interest expenses on notes payable and other long-term liabilities at the end of the period
• Interest expense is incurred with passage of time. Unless interest is paid on the last day of the accountant period, we need to adjust for interest expense incurred but not yet paid. This means we must accrued interest costs from the most recent payment date up to the end of the period.
• You have to figure out the salary, payable, and the salary expense, and cash
also intrestpayable and intrest expense