Explore commonly used personal finance terms.
Accrued income represents earnings that have been accumulated but not yet received, such as interest, dividends, or rent owed. This income is recorded as an asset on financial statements, reflecting future cash inflows for which the payment date is set in the future. Accrued income is essential for accurate financial reporting, as it accounts for all revenue earned within a period, even if it hasn’t yet been paid. This practice aligns with the accrual accounting method, ensuring revenue and expenses are matched in the periods they are earned and incurred.
