What is the term for expenses that have been incurred but not yet paid in cash during the current period?

The correct term for expenses that have been incurred but not yet paid in cash during the current period is "accrued expenses." This concept is rooted in the accrual basis of accounting, which recognizes expenses when they are incurred, regardless of when the cash payment is made.

Accrued expenses are recorded as liabilities on the balance sheet because they represent an obligation to pay for goods or services that have already been received. For instance, if a company has received utilities for the month but has not yet paid the bill, this creates an accrued expense. Recognizing these expenses ensures that financial statements reflect all obligations in the correct reporting period, providing a more accurate picture of the company's financial position.

In contrast, deferred expenses refer to costs that have been paid in advance but are not yet recognized as expenses in the financial statements. Prepaid expenses are a specific kind of deferred expense where payment has been made for future benefits. Operating expenses encompass all ongoing costs for running a business but do not specifically indicate whether they have been paid or incurred.