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Accrued Income

Incomes which are earned during the year but not received till the end of the accounting year are termed as Accrued Income / Earned Incomes/ Income Receivable.

Adjustment Entries

 

Accrued Income Account Dr.
  Income Account  
(Being income received in advance)  

Accounting treatment

Accrued income will be added to the concerned income account in the Profit and Loss account because it the income for that particular year (matching principle)
Accrued incomes are asset for the business and appear under the Current Assets in the Balance Sheet.

Note: If Accrued Incomes appear inside the Trial Balance then it will ONLY appear under the Current Assets in the Balance Sheet.

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