closing

accrued expense

An accrued expense is a cost that has been incurred but not yet paid as of the closing date, such as property taxes paid in arrears or interest on a loan being assumed. At closing, the seller owes the portion of the accrued expense covering the time the seller owned the property, so it is prorated and shown as a debit to the seller and a credit to the buyer, who will pay the full bill later.