Accrued

Accrued is a term used in accounting and finance to describe revenues or expenses that have been earned or incurred but have not yet been billed, invoiced, or paid. Under accrual accounting, such items are recognized when the economic event occurs, not when cash is exchanged.

Accrued revenue refers to revenue earned by delivering goods or services but not yet billed or received. For example, a service performed in December that is invoiced in January results in December revenue recognition and an accounts receivable balance.

Accrued expenses are obligations for goods or services already received but not yet paid or invoiced. An example is utilities used in December billed in January; the adjusting entry records the expense and a liability, typically Accrued Expenses or Accrued Liabilities.

Accrued liabilities are current obligations recognized before payment. They arise from accrued expenses and appear on the balance sheet even though cash has not yet changed hands.

Accrued interest is interest income or expense that has accumulated but not yet been paid or received. It is common with loans or investments, and is settled when payment occurs.

Accrual accounting differs from cash-basis accounting, which records items only when cash moves. Adjusting entries at period end align financial statements with the accrual concept, differentiating accruals from deferrals.