What journal entry reflects accrued expenses at year-end?

Accrued expenses represent costs that a company has incurred during a specific accounting period but has not yet paid. At year-end, businesses need to recognize these expenses to accurately reflect their financial position according to the accrual basis of accounting.

The correct journal entry involves debiting the expense account to recognize the cost associated with the goods or services received and crediting a payable account to create a liability that indicates that the payment is owed. This accurately reflects the obligation the company has to pay in the future, ensuring that both expenses and liabilities are properly recorded in the financial statements.

By recording the entry in this manner, the company's financial statements provide a more accurate depiction of its financial health, ensuring that expenses are matched with the revenues they helped generate in the correct reporting period. This enhances the reliability and usefulness of the financial information provided to users, helping them to make informed decisions.