Accrued Revenue (Accounting) - Explained
What is Accrued Revenue?
Written by J. Mance Gordon
Updated at April 18th, 2024
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What is Accrued Revenue?
Accrued revenues are where I have earned cash that I have not received yet. These are revenues earned in a period that are both unrecorded and not yet received in cash or whatever other assets they may be received in.
Example of How to Record Accrued Revenue?
So, I've earned accrued revenue, I just haven't got it yet. I've been earning them maybe over the course of time leading up to the end of the accounting period (generally December 31st). I have to do an adjustment that says this is what I've earned up to this point.
Bravo company was or has earned $600 in interest from the bank. We find out on December 31st exactly how much interest it's earned. So, we need to record that.
I'm expecting to receive it in the future, so this is going to be receivables. It's not going to be accounts receivables as this is specific to interest. So, we're going to call it interest receivables and debit it for $600. I've earned the money, so I need to also claim it as a revenue. So, we're going to call it interest revenue and make a credit for the $600.