Also known as outstanding income, accrued income is the income which has been earned during a particular accounting period, but has not been received till the end of that accounting period. So, they grow by addition and stay due to being received in the forthcoming accounting periods.
Examples include accrued interest, accrued rent (to be received), etc. Accrued income is recorded in the books at the end of an accounting period to show true numbers of a business.
Out of the three types of accounts in accounting, accrued income is a personal account and is shown on the asset side of a balance sheet.
Journal Entry for Accrued Income (or) Outstanding Income
|Accrued Income A/C||Debit|
|To Income A/C||Credit|
Let’s assume that in March there were 30,000 due to be received as interest on investment which wasn’t received due to some reason. To record this in the annual statements for the period ending on March 31, the following journal entry is posted
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|Accrued Interest A/C||30,000|
|To Interest Received A/C||30,000|