Accrued revenue rises when a business records sales without receiving payment for the goods or services sold as they do not invoice the customer at the time of the sale.
The only difference between accrued revenue and regular revenue is if the payment by the customer was done immediately. If the payment was done immediately the accounting treatment would be fairly simple: The bank or cash account would be debited whilst the sales account would be credited. If the payment was not done immediately then there would be two entries:
The first entry would be done at the time of the sale. This is due to two accounting principles which are revenue recognition and matching principle. Therefore, trade receivables account is debited and the sales account is credited. The sales balance would be seen in the income statement whilst the trade receivable balance would be seen in the balance sheet as an asset.
The second entry would be recorded at the time of receiving payment from the customer. This is when the bank or cash account would be debited and the balance in the trade receivable account would be written off by crediting the account.
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