What type of expenses owed in arrears are a debit to the seller?

Accrued expenses are costs that have been incurred but not yet paid, meaning they are owed in arrears. In a real estate transaction, when a seller has accrued expenses, such as property taxes or utility bills that are due but not yet paid at the time of closing, these expenses are considered a debit to the seller. This is because the seller is responsible for these amounts that will need to be settled with the buyer at the time of the sale.

When the closing occurs, the accrued expenses essentially reduce the amount of money the seller receives from the transaction, as the buyer may be credited for these costs that the seller has yet to pay. Therefore, recognizing accrued expenses as a debit helps ensure that both parties are fairly compensated for what is owed, and it accurately reflects the financial obligations at the time of sale.

On the other hand, prepaid expenses come into play when the seller has already paid certain costs in advance, which would be considered credits instead of debits. Fixed expenses are typically predictable and regular costs but do not inherently indicate whether they are paid or overdue. Miscellaneous expenses might vary widely and lack the specific context of being owed in arrears, making accrued expenses the most relevant and accurate choice in this scenario.