Accrued expenses are costs that a company has incurred but has not yet paid. These expenses are recorded in the accounting period in which they occur, ensuring that financial statements reflect all obligations. Common examples include salaries, utilities, and interest payments that are due but not yet settled. By recognizing accrued expenses, businesses adhere to the matching principle in accounting, which states that expenses should be matched with the revenues they help generate. This practice provides a more accurate picture of a company's financial health and performance during a specific period.