Accrue refers to the concept of accumulation of any expense or income over a period of time. As per standard accounting policies, a business has to account for all the accrued expenses within the financial year whether they are actually paid or not.
Similarly, the business also has to account for all the accrued income whether it is received during the financial year or not. The idea is to represent a true and fair view of the financial position of the business at the end of the financial year. This will help in effective comparison of the actual performance of the entity with respect to its last performance as well as its peers.
Examples of accrued expenses
Some examples of such expenses are interest expenses, rent expenses, etc