What are examples of accrued liabilities?

Accrued liabilities are recognized obligations that a company has incurred but not yet paid or recorded in its financial statements. They represent expenses that have been recognized in the accounting period but are not yet settled through cash payment.

Interest payable and wages payable are classic examples of accrued liabilities. Interest payable arises when a company incurs interest on borrowed funds that has not yet been paid by the end of the accounting period; this creates an obligation to pay that interest in the future. Similarly, wages payable refers to the wages owed to employees for work performed during a particular accounting period that have not yet been disbursed by the company. Both of these items are recorded on the balance sheet as liabilities, reflecting the company's duty to pay these amounts in the future.

In contrast, other options present items that do not fit the definition of accrued liabilities. For example, cash dividends are distributions of income that a company plans to pay to its shareholders but are generally considered in a different context. Accounts payable is a liability, but it specifically relates to amounts owed to suppliers for goods and services received, rather than expenses that have been accrued. Stockholders' equity and sales revenue also do not represent obligations the company must fulfill in the near term but are accounts that reflect ownership interest and