Accrued Salaries and Wages

Accrued salaries and wages describe expenses a company records for services rendered by employees without yet receiving payment. This type of occurrence is common at the end of an accounting period when the work is done by the employees, but remuneration is held back. Accrued salaries and wages are entered in the financial statements by way of adjusting journal entries, in order to match expenses with the period of expenditure. Accrued amounts on the balance sheet are listed as current liabilities, and this goes a long way in maintaining the accrual basis principles and also provide means for creating reliable financial reports.