What Is Accrued Income?

Accrued income is money that’s been earned but that isn’t received during the accounting period. Examples of accrued income include interest on deposits, rent, commissions, and discounts.

Since accrued income accumulates in the current year, it should be credited to the income statement (trading and profit and loss account), and the accrued income account should be debited, which appears as an asset in the balance sheet.

Adjusting Entry for Accrued Income:

Adjusting Entry for Accrued Income

Frequently Asked Questions

What is an accrued income?

Accrued income is earned but not yet received during the accounting period.

What are examples of accrued income?

Examples of accrued income include commissions, rents, and discounts.

When is the adjusting entry for accrued income made?

The adjusting entry for accrued income is made at the end of an accounting period. It records the credit balance in the accounts that had previously been debited to record their corresponding accrued incomes.

Is accrued income treated as expenses?

No, accrued income is not an expense because it has not been actually paid. However, when and if the money is received, then the corresponding expenses will be recorded in the accounting.

When is accrued income recorded?

Accrued income is recorded when and if an entity receives the money.

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