Accrued Liabilities (Accrued Expenses) – Current Liabilities

As we noted earlier, a key reason for making adjusting entries at the end of an accounting period is to recognize liabilities that are not already in the accounting records. This practice applies to any type of liability. As you will see, accrued liabilities (also called accrued expenses) can include estimated liabilities.

Here, we focus on interest payable, a definitely determinable liability. Interest accrues daily on interest-bearing notes. In accordance with the matching rule, an adjusting entry is made at the end of each accounting period to record the interest obligation up to that point.

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