Accrued expenses are costs that a business 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. By recognizing accrued expenses, companies adhere to the matching principle, 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 over a specific period, aiding in better decision-making for stakeholders.