Difference between Accrued Expenses and Accounts Payable


Accrued expenses are those liabilities that have developed over the long run and are expected to be paid.

Accounts payable, then again, are current liabilities that will be paid sooner rather than later. Beneath, we delve into somewhat more detail depicting each sort of accounting report thing.

The essential contrast between accounts payable and accrued expenses is that accumulated cost or accrued expenses are the costs which are by the organisation brought about by one bookkeeping period or accounting period by the organisation. However, not paid really in the same bookkeeping period while accounts payable is the sum owed by the organisation to its provider when any products are bought, or benefits have profited.

Accrued expenses and accounts payable are two fundamental terms recorded in the balance sheet of associations. The basic contrast between these terms is that accounts payable is the payment to credit institutions or creditors who have made sales to the organisation using credit. Accrued expenses are perceived in the bookkeeping books for the period it is caused in whether or not cash is paid.

Meaning of Accrued Expenses:

Accrued expenses, additionally called accrued liabilities, are payments that an organisation is committed to paying in the future for which products and services have effectively been conveyed. These types of costs are acknowledged on the balance sheet and are generally recorded under the head of current liabilities. Accrued liabilities are changed and perceived on the balance sheet toward the finish of each bookkeeping period; changes are utilised to archive products and services that have been conveyed yet not charged.

Instances of accumulated costs include

  • Utilities utilised for the month, however, a receipt has not yet been obtained before the finish of the period.
  • Compensation that is caused payments yet still can’t seem to be made to workers.
  • Administrations and products consumed, yet no receipt has been obtained at this point.

The expression ‘accrued’ signifies accumulation or an increment. At the point when an organisation builds expenses, this implies that its piece of neglected bills or unpaid bills is expanding. Following the accrual technique for bookkeeping, costs are perceived when they are brought about or when they are incurred, not really when they are paid.

Meaning of Accounts Payable:

Accounts payable (AP), is sometimes referred to as ‘Payables,’ are an organisation’s continuous costs or ongoing expenses that are commonly transient or short-term obligations, which should be paid off in a predetermined period to stay away from default. Default is the inability to reimburse an obligation or repayment of a debt.

Organisations, for example, producers that purchase supplies or stock from a provider or a supplier, are regularly permitted to pay the provider sometime in the not too distant future. As such, the provider expands terms for the payment, meaning the payment probably won’t be expected until 30, 60, or 90 days. Accounts payable are basically an augmentation of credit from the provider to the producer and permit the organisation to create income from the provisions or stock so the provider can be paid.

Accounts payables are viewed as current liabilities in light of the fact that the payments are ordinarily due within one year of the date of the exchange. Account liabilities are perceived on the asset report or the balance sheet when the organisation purchases products and services using a loan or credit.

Difference between Accrued Expenses and Accounts Payable:




Accrued expenses is a term utilised in bookkeeping or accounting where the cost is recorded in the books before it is paid for.

Accounts payable is the sum that the organisation needs to pay at the present moment or short-term to the lenders or creditors.

Treatment in the Balance Sheet

Costs are intermittent and are recorded on the accounting report or the balance sheet as accrued expenses as a current liability in the balance sheet.

These costs are a piece of the regular process and are recorded as accounts payable as a current liability on the asset report or the balance sheet.


All organisations incorporate accumulated costs.

Accounts payable emerge just when buys or purchases are made using credit.


Lease, compensation, bank credit’s interest, fundamentally where payments are made month to month.

Accounts payable is recorded in the books when the payment is due to the creditors.


Accrued expenses are things you owe yet don’t have solicitations for.

Accounts payable are the solicitations the business has received.


These costs are recorded on the asset report toward the year’s end and are changed by the journal entries.

Accounts payable are acknowledged on the monetary record when an organisation purchases goods and services using a loan or credit.

Counter Party

These costs are payable to banks and employees.

These costs possibly have been recorded when payment is due to creditors.


Accumulated costs or accrued expenses are the costs that are now caused previously and will be expected later on the period. As talked above, accrual accounting is a strategy for following these payments.

Accounts payable, then again, are liabilities that will be paid soon. Payables are those which are still to be paid, while costs are those that have effectively been paid.

Instances of payables are electric bills, phone bills, and furthermore incorporate those that are bought utilising credit cards or credit notes, while models or costs are payments for providers, lease, and suppliers.

Also, see:

Trading and Profit and Loss Account

Scope of Financial Management

Uses and Importance of Financial Statements

Class 11 Accountancy Chapter 3 Recording of Transaction 1

Class 11 Accountancy Chapter 4 Recording of Transaction 2

Materiality Concept in Accounting

What Is Working Capital in Accounting

Going Concern Concept

Accounting Period Concept

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