Which of the following best describes accrued expenses?

Accrued expenses refer to costs that a business has incurred for services or goods that have been received but for which payment has not yet been made. This means that the business recognizes the obligation to pay these expenses in its accounting records even though the cash has not yet been disbursed. This aligns with the accrual basis of accounting, which requires recognition of expenses in the period they are incurred, regardless of when the cash is actually paid. Understanding this concept is crucial for managing cash flow and accurately reporting financial standings.

The other options highlight concepts related to costs and expenditures, but they do not accurately capture the essence of accrued expenses. For example, late payments to suppliers refer to overdue obligations but do not necessarily involve the accrual accounting framework. Unforeseen expenses pertain to unexpected costs that may arise, but they do not quite align with the definition of accrued expenses since they do not directly imply unpaid obligations for received services. Cash payments made in advance involve prepayments for future services, which again differs from the nature of accrued expenses where services have already been utilized without immediate payment.