Question

what​ is accrural income ? with example..

Answer 1

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Accrued income is earned in a fund or by a company for providing a service or selling a product that has yet to be received. Mutual funds or other pooled assets that accumulate income over a period of time but only pay out to shareholders once a year are by definition accruing their income.


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Answer 2

Accrued income is earned in a fund or by a company for providing a service or selling a product that has yet to be received. Mutual funds or other pooled assets that accumulate income over a period of time but only pay out to shareholders once a year are by definition accruing their income. Individual companies can also accrue income without actually receiving it, which is the basis of the accrual accounting system.

For example, assume company A picks up trash for local communities and bills customers at the end of every six-month cycle. Even though company A does not receive payment for six months, the company still records the payment as a debit to accounts receivable. The bill has not been sent out, but the work has been performed and therefore revenue has been earned. So, if a company earns $12 million every six months, but it can only bill its customers twice a year, it accrues $2 million every month for six months in income until the bill is paid.