本文发表在 rolia.net 枫下论坛It looks like many accountants are still struggling in the basic accounting even though they already have years of accounting experience. Accrued expenses are accruals with invoices and accrued liabilities are accruals without invoices? It makes no sense to me!

Let us back to the accounting basis. Why you need to accrue costs at the month end? Because you are doing accrual-based accounting and thus you need to accrue costs incurred but not booked before period end ( please note: “booked” does not mean “paid”). If you are doing cash-based accounting, no accruals are needed (for example, capital expenditures)

What are the differences between the accruals with invoices and those without invoices? NO DIFFERENCES! We need to debit expenses accounts and credit accrued liabilities accounts for both- the same journal entries which means that they are sitting in the same accounts in the balance sheets and income statements. In the auditing practice, for those accruals without invoices, auditors usually still ask for invoices or payments (you will get them after the month end) to check the reasonability of the accrued liabilities in your book, the same as for the accruals with invoices.

I would get sick of it if somebody asked me in the interview what were the differences between accrued expenses and accrued liabilities. If you would like to answer the question, I think Qinying2012 provided the best answer: “ I would like to say that accrued liability is from the b/s perspective, meanwhile the accrued expense is from income statement perspective.” I think you know the accounting principals very well.更多精彩文章及讨论，请光临枫下论坛 rolia.net