With regard to accrued expenses, when does cash payment typically occur?

In the context of accrued expenses, cash payment typically occurs after the expense has been recorded. Accrued expenses represent liabilities for services or goods that have been received but not yet paid for by the end of the accounting period. Thus, when an expense is recognized in the financial statements (when the service or goods have been consumed), it leads to the recognition of a corresponding liability. This entry acknowledges that while the expense is incurred, the cash payment will take place subsequently, usually in the following accounting period.

This understanding aligns with the accrual basis of accounting, which dictates that expenses should be matched with the revenues they help to generate within the same period, regardless of the timing of cash flows. Therefore, recording the expense first ensures accurate representation of financial performance during that period, while the cash outflow occurs later when the payment is made.