What is Accrued Income?
Accrued income is revenue that has been earned but not yet received. For example, if you work for a company and your salary is paid monthly, your accrued income for the month of March would be the amount of money you have earned for the work you have done in March, even if you have not yet been paid.
Accrued income is recorded in the books of accounts at the time it is earned, even if it has not yet been received. This is because the accrual concept of accounting recognizes that revenue is earned when it is earned, not when it is received.
The accrual concept of accounting is important for taxation purposes. In the example above, your accrued income for the month of March would be included in your taxable income for the 2023 tax year, even if you do not actually receive your salary until April 2024.