Which of the following is an example of an accrued expense?

• A. Prepaid insurance.
• B. Salaries payable at period end.
• C. Unearned revenue.
• D. Depreciation.

Answer: (B)

An accrued expense happens when you incur an expense in the current period but haven’t paid for it yet, creating a liability. Salaries payable at period end fits this pattern: employees have earned their wages during the period, but the payroll isn’t paid until afterward, so you record a salaries payable (and a salaries expense) to reflect the obligation.

Prepaid insurance is money paid in advance and counted as an asset until the benefit is consumed. Unearned revenue comes from cash received before delivering goods or services, which is a liability related to future revenue. Depreciation is the systematic allocation of a long-term asset’s cost over its useful life and does not involve a current obligation to pay someone, so it isn’t an accrued expense.