What is the Journal Entry for Accrued Income?


Journal Entry for Accrued Income

It is income earned during a particular accounting period but not received until the end of the same accounting period. Accrued income is also known as outstanding income and income earned but not received.

As per accrual-based accounting income must be recognized during the period it arises irrespective of when the money is received. Accrued income acts as an asset and its journal entry considers the rule “debit the increase in assets” (modern approach of accounting).

Journal entry for accrued income is

 Accrued Income A/C  Debit
   To Income A/C  Credit

 

Example

Let’s assume that in March 30,000 due to be received as rent wasn’t received due to some reason. To record rent earned but not received in the annual statements for the period ending March 31,

Journal entry for accrued rent will be

 Accrued Rent A/C  30,000
   To Rent A/C  30,000

 

> Read How to Prepare a Journal Entry (With Steps)



 

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