Question

Q26. Explain Accounting Treatment of "Accrued Income" in Final Accounts​

Answer 1

Answer:

Accrued income is an amount earned but not actually received during the accounting period or till the date of preparation of Final Accounts for the period concerned. ... Thus such outstanding income needs adjustment when Final Accounts are prepared. For instance, commission has been earned but not received Rs 100.

Answer 2

Answer:

The preparation of simple final accounts pre-supposes the absence of any accounting complexities which are normal to business operations. These complexities arise due to the fact that the process of determining income and financial position is based on the accrual basis of accounting.