Is Accounts Receivable Accrued Revenue?

Previously, we studied about “Is Accounts Receivable A Revenue”, but here we will study about the very important and basic Accounting Question that is, Is Accounts Receivable Accrued Revenue” or Accounts Receivable VS Accrued Revenue.

The fundamental difference between Accounts Receivable And Accrued Income existed with respect to Sales And Income. The Accounting Term “Accounts Receivable” is used in case of Sales of goods or services or Assets, Plants, Supplies, etc., and The Accounting Term, “Accrued Revenue” is used in case of Income.

Goods or Services sold for the purpose of earning revenue is called Sales or it is the price of goods sold or services rendered to customers on Cash or Credit Basis, Accounts Receivable is also created in case of Sales of Assets, Plants, Supplies that are used in the business and not for resale purposes while For Accrued Revenue we are concerned in income that is the amount left after deducting all the relevant expenses incurred in earning the revenue.

You may also be interested in “Difference Between Income And Revenue In Accounting With Examples”

Accounts Receivable is created when goods sold on credit basis or services rendered by the business to customers on Account.

While Accrued Revenue is Created in case of Income received in Advance eventhough the company does not earn the revenue or services rendered to the customers.

For Example, if the company provides Internet Services to Customer then any amount unpaid from customers create Accounts Receivable for the company. while return on investment is the income of the company invested in a project but this income becomes Accrued Investment as it is earned by the company but not received by the company so it considered as a Current Asset at the time when payment is not received from the investment company.

So, we can say that Accounts Receivable / Creditor is not Accrued Income in Accounting.