How to record Accrued Revenue?
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HOW TO RECORD ACCRUED REVENUE?
As previously mentioned in the video • What are Accruals and Prepayments? an accrual is an adjustment to match the revenues received in a period. Accruals play an important role to make sure that the business records show a true and objective reflection of an organisation and its activities. An accrued revenue is where the amount received is lower than the amount of the revenue earnt. The amount still owing to business is accrued and because it relates to the current period it must be added to the amount already received. This follows the principle for treating accruals and prepayments, whereby accruals you add and for prepayments you deduct.
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