accrued revenue
/ uh-KROOD REV-uh-noo /
Picture a gardener who tends a client's lawn every week through the summer but agrees to send one bill at the end of the season. By the end of June she has done a month of real work and genuinely earned that money — yet no invoice has gone out and no cash has come in. If she closed her books on 30 June and ignored that work, her income would look too low. Accrued revenue is the name for income you have earned but have not yet billed or been paid for.
In accrual accounting, revenue is recorded when it is earned, not when cash arrives. So at period end you record an adjusting entry that debits a receivable (an asset, because the customer now owes you) and credits a revenue account. If the gardener earned 800 in unbilled work by 30 June, she debits Accounts Receivable (or a specific account like Fees Receivable) 800 and credits Service Revenue 800. When the customer later pays, she debits Cash and credits the receivable — the revenue is not counted twice.
Accrued revenue is one of the two accrual-type adjustments (the other is accrued expense). It shows up constantly in real life: interest a bank has earned but not yet collected, rent a landlord is owed for the current month, or work completed under a long contract. The honest caveat is that recognising accrued revenue requires judgement about how much has truly been earned; over-aggressive estimates are a classic way companies flatter their profits.
A consultant finishes 12 days of a 20-day project by 31 December at 500/day. She has earned 6,000 but will invoice in January. Adjusting entry: debit Accounts Receivable 6,000, credit Consulting Revenue 6,000. December's income statement now reflects the work December actually did.
Earned but unbilled work becomes a receivable plus revenue at period end.
Accrued revenue is an asset on the balance sheet (a receivable), not just a revenue figure. Do not confuse it with unearned revenue, which is its mirror image — a liability for cash collected before the work is done.