What is the correct double entry for an accrued expense?

The correct double entry for an accrued expense is to debit the expense account and credit the accruals account. This entry reflects the recognition of an expense that has been incurred but not yet paid, which is a key principle in accrual accounting.

When you debit the expense account, you are increasing the expenses recognized in the accounting period, which affects the profit or loss of that period. This aligns with the matching principle, where expenses are matched with the revenues they help to generate in the same period. By crediting the accruals account, you are recording a liability on the balance sheet, acknowledging that the company owes this amount to a supplier or service provider.

This correct approach ensures that the financial statements accurately reflect the true financial position of the business by recognizing liabilities that have been incurred, even if the cash has not yet been paid. In contrast, the other options do not correctly capture the essence of accrued expenses and would lead to inaccuracies in financial reporting.