Accrued charges

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Updated: Aug 20, 2021

An accrued charge is the measure of an expense incurred for which no charge has yet been made by the creditor. The fees chargeable for an audit may appear under this heading where the accounts are printed before the auditor has submitted his account. Rent, rates, electricity charges, etc., may also fall under this heading when demands therefor are made in arrears, e.g. the charge for electricity used can only be assessed when the meter is read, which must be after the expense has legally been incurred. Accrued charges should be distinguished both from provisions for anticipated liabilities, the amount of which cannot be determined at the time an account is being drawn up, and from payments in advance, which refer to monies paid for future benefits. Telephone bills are a useful instance of the application of both accrued charges and payments in advance. They contain both a bill for calls made in the past and a rental charge for the future.

Reference: The Penguin Business Dictionary, 3rd edt.



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James Knight
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James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.