What is an accrued expense and how is it recorded in the books?

An accrued expense is a cost the business has incurred in the period but not yet paid, such as March electricity or salary that will be paid in April. Under the accrual system you record it in the period it relates to, not when the cash goes out.

At period end, pass a journal entry: debit the relevant expense account (for example, Electricity Expense) and credit a liability account such as Outstanding Expenses. When you pay it in the next period, debit Outstanding Expenses and credit Bank or Cash, so the expense is not counted twice.