Xiexie. I got this question from interview. The controller asked me what is difference between accrued liability and accrued expense. I think it is preety much the same. Just like Amortization and Depreciation.
-12652(12652);
2012-10-18(#68373@41)
I answered Accrued expense is focusing on short-term items, I don't know it is right or not.
-12652(12652);
2012-10-18(#68375@41)
I would like to say that accrued liability is from the b/s perspective, meanwhile the accrued expense is from income statement perspective. Not sure if it makes to you or not.
-qingying2012(qingying);
2012-10-18(#68377@41)
Is Accounts Payable a control account? How can you post G/J entry to a control account?
-newstudents(仲夏之雪);
2012-10-18(#68393@41)
To me, they mean the same thing. For example, you can accrue audit fee on a monthly basis. Once you are billed for the year-end audit, you can reverse the accrued liability and adjust the difference.
-newstudents(仲夏之雪);
2012-10-18(#68395@41)
:) I think you got the points. I did not see any account called accured expense on the income statement. I meant it is a concept for me,not a real account. Now we all know the answer. It`s good to have this discussion here.
-qingying2012(qingying);
2012-10-19(#68410@41)
Good points! I still believe that Accrued expense is B/S account under Current Liability. But Accured Liability you may have it under both Current Liablity or Long-term Liability.
-12652(12652);
2012-10-19(#68414@41)
Exp is IS item. I asked 2 questions is because those estimated cost/accru. liab. and accr. exp/ AP.
-criss(criss);
2012-10-19(#68417@41)
Crispy clear information with examples. Great! Way to go. Thank you!
-goingconern(GoingConcern);
2012-10-19(#68403@41)
google is a very powerful tool :)
-newcomer546(Sleepyhead);
2012-10-19(#68405@41)
this is what i found about accrued expenses using google.Accrued expenses are expenses that have been incurred, but not yet paid for.
To put it another way, an accrued expense is paid after being recorded on
the books. Every adjusting entry for accrued expenses debits an expense
account, increasing expenses on the income statement and reducing net
income, and credits a payable account, increasing liabilities on the balance sheet.
http://www.aipb.org/pdf/AdjustingEntries.pdf
oops... which one is right. it seems google is confused too.
-criss(criss);
2012-10-19{492}(#68407@41)
From the title of the article, it seems like they do not distinguish ACCRUED EXPENSES and ACCRUED LIABILITIES. They are treating them the same concept.
-newcomer546(Sleepyhead);
2012-10-19(#68411@41)
Yes, I also agreed. My point is I think Accured expense is always under Current liabities.
-12652(12652);
2012-10-19(#68415@41)
this one looks good to me. Also if anyone is interested, IAS 37 (11), in summary, it tells what kind of expenses go to which liab (Trade payable aka AP, accrual or provision)
-criss(criss);
2012-10-19(#68424@41)
I am inclined to agree with the concept in the article not on the youtube.if i have to choose one between two.
-criss(criss);
2012-10-19{36}(#68421@41)
My point is google is powerful but not trustworthy.
-criss(criss);
2012-10-19(#68429@41)
Wow, cool! So simple. But we all were puzzled. Thank you for sharing!
-qingying2012(qingying);
2012-10-19(#68406@41)
is it right?
-criss(criss);
2012-10-19(#68409@41)
I dont' think so. payment before expene occurs is prepaid expense.
-12652(12652);
2012-10-19(#68412@41)
It does not really matter for me. Basically, we all thought they were the same thing based on the accouting cut off and matching principles.Let`s say the prepaid expense. It presents on the asset side. But it will be expenses for the following accounting period. So we call it accured expense. On the other hand, we all do accual for certain expenses like rent or utilities. Sometimes, we estimate the amount and credit payable.
So we know the nature of the transactions. We do the right entries. It`s done. :)
-qingying2012(qingying);
2012-10-19{374}(#68413@41)
I usually do not reply this kind of topic. The answer is straightforward. But the problem is that some answers are really wrong, I do not think it is fair to leave it heremisleading other people. At least, I feel I should at lease bring up the question.
-criss(criss);
2012-10-19{82}(#68416@41)
An accrued expense is an expense that an entity has already incurred, but for which there is not yet any expenditure documentation in the accounting system.the definition of google result about expenses not yet paid is incorrect
-ltp1(LeTianPai);
2012-10-19{72}(#68426@41)