What is the double entry for accrued income?

Accrued income refers to income that has been earned but not yet received. It represents a receivable on the balance sheet, indicating that the business is owed money for services or goods that have been delivered to a customer.

The correct double entry for accrued income involves recognizing the income that has been earned in the income statement while also recording a corresponding asset on the balance sheet for the amount owed. By debiting accrued income, you are increasing the asset account, which reflects that the business expects to receive this income in the future. By crediting income, you are affirmatively recognizing the revenue earned during the accounting period, which is consistent with the accrual basis of accounting.

This combination ensures that both the financial position and the performance of the business are accurately depicted. It allows the business to reflect income earned, even if the cash has not yet been received, which is crucial for proper financial reporting.