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How to Book Accrued Expenses Journal Entry
Accrued expenses are expenses that have been incurred and are neither invoiced nor paid. For expenses that are invoiced and unpaid, these should be recorded in the proper accounting period via accounts payable.
As an example: a company has incurred $1,000 in legal fees that have not been invoiced nor paid. The journal entry is:
Debit: Legal Fees Expense $1,000
Credit: Accrued Expenses (Liability) $1,000
Generally, accrued expenses are reversed in the subsequent month.
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