What is accrued payroll?

Accrued payroll refers specifically to costs that have been incurred by the employer for employee work that has been completed but not yet paid at the end of the accounting period. This concept is grounded in the accrual basis of accounting, which dictates that expenses should be recognized in the period they are incurred, regardless of when the payment is actually made.

In practice, this means that if employees have worked during a pay period that extends into the next accounting period, the company must recognize those payroll expenses even though the actual payment will occur later. This is critical for accurate financial reporting, as it ensures that all liabilities associated with payroll are reflected in the financial statements when they are due, thereby providing a more accurate picture of the company's financial position.

Thus, the correct answer highlights the nature of obligations that exist at the point of reporting, while other options describe different concepts, such as payments already made or future estimates that do not reflect the current liabilities of the business.