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.What Is Accrued Income?
Adjusting Entry for Accrued Income:
Adjusting Entry for Accrued Income FAQs
Accrued income is earned but not yet received during the accounting period.
Examples of accrued income include commissions, rents, and discounts.
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.
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.
Accrued income is recorded when and if an entity receives the money.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.
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