Many accrued liabilities are estimates of future expenses based on management s business expertise and projection of potential obligations Such estimates are recorded in reserves sometimes referred to as cookie jar reserves which are adjusted at financial statement dates to reflect current estimates In practice many accountants use reserve adjustments to smooth earnings to eliminate or reduce volatility that may negatively impact share prices Since management s obligation to sha

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The term accrued liability refers to an expense incurred but not yet paid for by a business These are costs for goods and services already delivered to a company for which it must pay in the future A ... View the full answer