What is Accrued Liability?

A liability occurs when it is recognized and supported with a document as evidence of the liability. However, when a liability is not supported with a document, like a bill from the supplier and the enterprise has to close its books, it records it as Accrued Liability. In other words, an Accrued Liability is an obligation that a business enterprise recognizes when it is not supported with evidence or if the evidence is available but the payment has not been made.
The concept of Accrued Liability is mostly used in case when the enterprise has already used the products or services provided by the supplier but has yet not received any invoice or bill as a proof of the transaction from the supplier. The amount is calculated on the basis quantity recorded in the accounts of the enterprise and pricing information from the purchase register.