What is accrued income
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Posted by Shayma Khan 6 years, 10 months ago
- 2 answers
Yogita Ingle 6 years, 10 months ago
Just as some of the expenses incurred during the year may not be settled in cash at the end of the year, similarly some incomes may have been earned but have not been received. Thus, accrued incomes are those incomes which have been earned during the accounting period but have not been received till the end of the accounting period. Such incomes are called 'Outstanding incomes' or 'Incomes earned but not yet received'. Common examples of such incomes are commission receivable, income on investments due but not yet received etc. As per the accrual concept of accounting, the full income of the period, both received and yet to be received, should be shown in the Final Accounts otherwise the profit and assets will remain understated. An adjusting entry passed is:
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Sakshi Sharma??️??️ 6 years, 10 months ago
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