(L.O. 5) An accrued expense is an expense that:

a. has been incurred but has not been paid.

b. has been paid but has not been incurred.

c. has been incurred for which payment is to be made in installments.

d. will never be paid.

Approach and Explanation: Write down a definition for accrued expense. Compare each answer selection with your definition and choose the best match. Expenses may be paid for in the same period in which they are incurred or they may be paid for in the period before or in the period after the one in which they are incurred. An accrued expense refers to an expense that has been incurred but has not yet been paid. It will be paid for in a period subsequent to the period in which it was incurred. (Solution = a.)