Definition of Accrued Income
Accrued income refers to amounts that have been earned, but the amounts have not yet been received. For example, a corporation may have its excess cash invested in an investment security that pays interest every six months. Between the interest payment dates, the company will have:
- Accrued interest income that is to be reported on the income statement
- Accrued interest receivable that is to be reported on the balance sheet
Accrued Income Reported on the Balance Sheet
The amount of accrued income that a corporation has a right to receive as of the date of the balance sheet will be reported in the current asset section of the balance sheet. It could be described as accrued receivables or accrued income.
The amount of the accrued income reported on the income statement also causes an increase in a corporation's retained earnings, which is part of the stockholders' equity section of the balance sheet.
Balance Sheet: Retail/Wholesale - Corporation