Question
Define Accrued Income. What is its adjusting entry?
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Answer
Accrued incomes are those incomes which have been earned during the accounting period but have not been received till the end of accounting period. Such incomes are known as Outstanding incomes or Incomes earned but not yet received. Common examples of such incomes are commission receivable, rent due but not yet received, etc. As per the Accrual Concept of Accounting, total income of the period, both received and yet to be received, are shown in the Final Accounts otherwise the profit and assets will remain understated. The adjusting entry passed is:
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