What is Accrued Income In Accounting - Definition - Meaning - Example

Accrued Income / Revenue or Income / Revenue Receivable is a Current Asset for the company because the company already earns it by providing services to the clients but still the payment is not received from clients. Examples are Accrued Investments or Return on Investments, Accrued Rent Income / Revenue, Accrued Commission, etc.

Accrued Income is also known as Accruals or Outstanding Income / Revenue.

Accrued Income Journal Entry

Example: Suppose, a company makes an investment of Rs. 500000 to a project and earns a return / profit on investment Rs. 5730 during the accounting period, but only the payment of Rs. 2730 is received and remaining payment of Rs. 3000 is still due and the company has not yet received it at the end of accounting period, then we pass the following adjusting entry in the book of business:

                                         Accrued Investments a/c 3000

                                                                               Investment Received a/c 3000

(Return on Investment Accrued for the Period)

Accrued Revenue is recorded on Balance Sheet as a Current Asset under Assets Side and closed it when the payment is received by the company by passing Reversing Entry in order to cancel its effect.