Accrued income: Difference between revisions
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Accrued income is revenue earned by a business but not yet invoiced or received. | Accrued income is revenue earned by a business but not yet invoiced or received from the customer. | ||
It is an asset | It is an asset. | ||
(The related accounting entries being DEBIT Accrued income and CREDIT Revenue.) | (The related accounting entries being: DEBIT Accrued income asset in the balance sheet; and CREDIT Revenue in the income statement.) | ||
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Future economic benefits are expected to flow from the asset to the reporting entity. | Future economic benefits are expected to flow from the asset to the reporting entity. | ||
Namely the future receipt from the customer. | Namely the future cash receipt from the customer. | ||
There is no liability associated with this asset, because we have already undertaken the relevant revenue-earning work. | |||
For this reason, the revenue is recognised already, in the income statement. | |||
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* [[Deferred income]] | * [[Deferred income]] | ||
* [[Financial reporting]] | * [[Financial reporting]] | ||
* [[Income statement]] | |||
* [[Realisation]] | |||
* [[Reporting entity]] | * [[Reporting entity]] | ||
* [[Revenue]] | * [[Revenue]] | ||
* [[Revenue recognition]] | |||
* [[Work in progress]] | * [[Work in progress]] | ||
[[Category:Accounting,_tax_and_regulation]] | [[Category:Accounting,_tax_and_regulation]] | ||
Latest revision as of 14:49, 26 July 2024
Financial reporting - balance sheet - assets - accruals accounting.
Accrued income is revenue earned by a business but not yet invoiced or received from the customer.
It is an asset.
(The related accounting entries being: DEBIT Accrued income asset in the balance sheet; and CREDIT Revenue in the income statement.)
Future economic benefits are expected to flow from the asset to the reporting entity.
Namely the future cash receipt from the customer.
There is no liability associated with this asset, because we have already undertaken the relevant revenue-earning work.
For this reason, the revenue is recognised already, in the income statement.
