Final answer:
An expense that has been incurred but not yet paid for is known as an accrued expense, which is a liability recorded on a company's balance sheet for services or goods received before payment.
Step-by-step explanation:
The expense that has been incurred, but not yet paid for, is referred to as an accrued expense. Accrued expenses are recognized in the accounting period in which they occur, regardless of when the cash transaction happens. This concept reflects the accrual basis of accounting, which matches income and expenses to the period in which they are incurred rather than when cash payments come and go. For instance, if a company receives services from a firm and has not yet paid, the payment owed to the firm is an accrued expense.
In contrast to explicit costs, which are out-of-pocket and actual payments like wages or rent, accrued expenses might not involve an immediate outlay of cash. Companies record these costs as liabilities on their balance sheets, and they often involve services like utilities, salaries, or rent that have been used but not yet paid for.