Are accrued expenses a liability?

Yes. Accrued expenses are a current liability, usually shown separately from accounts payable on the balance sheet.

What happens to an accrual when the bill arrives?

Reverse the accrual on the first day of the next month, then book the bill normally. The month the bill lands nets to the difference between estimate and invoice.

Accrued expenses vs accounts payable

Accrued expenses are costs incurred that no bill has arrived for yet; accounts payable are bills received and approved but not yet paid — both are liabilities, separated by whether the vendor's invoice exists.

Each, defined

Accrued expenses

Accrued liability — An obligation for goods or services received but not yet invoiced or paid — wages, interest, professional fees — recorded by an accrual.

Accrued liability in the glossary

Accounts payable

Accounts payable — What we owe vendors for bills already received.

Accounts payable in the glossary

Side by side

Accrued expenses and Accounts payable compared
	Accrued expenses	Accounts payable
Document	No invoice yet	An approved vendor invoice
Amount	Estimated at month-end	Exactly what the invoice says
Cleared by	Reversed next month	Payment
Booked by	Close, by the accountant	AP, from the bill

How they relate

Accruals are estimates made at month-end so the month carries its costs. Payables are documents: an invoice with an amount and a due date.

When the bill arrives, the accrual is reversed and the payable is booked. A cost should sit in one or the other, never both.

Questions

Are accrued expenses a liability?: Yes. Accrued expenses are a current liability, usually shown separately from accounts payable on the balance sheet.
What happens to an accrual when the bill arrives?: Reverse the accrual on the first day of the next month, then book the bill normally. The month the bill lands nets to the difference between estimate and invoice.

Also confused with these

See it computed

Worked through: the calculators, the journal entries and the tools that use these terms.

Definitions are the glossary’s, generated from the same documents. Figures in the examples are computed by tested functions, not typed. General information for US companies under US GAAP, not accounting or tax advice.