What are accrued income and accrued expenses❓

What are accrued income and accrued expenses❓

Accrued income is income in the current accounting period. that have not been received but will be received in the next accounting period, such as accrued interest Accrued income is classified as current assets.

For example, a company deposited 10 million baht with 3% interest as a fixed deposit for 3 months, starting on November 1, 2017.

Debit accrued interest 50,000

Credit, interest received 50,000

When received on February 1, 2018, the cash received must be recorded. and clear the accrued interest account

Debit Cash 75,000

Credit Accrued interest 50,000

Interest earned 25,000

* Debit accrued income xxx - is an asset on the balance sheet.

* Credit accrued income xxx - is the income in the income statement.

Accrued expenses are expenses in the current accounting period. that have not been paid until the next accounting period, such as wages, etc. Accrued expenses are considered current liabilities.

For example, on December 31, 2021, the company has 3 days unpaid wages of 3,000 baht.

Debit, salary and wages 3,000

Credit, salary and accrued wages 3,000

When paying salaries and wages on January 4, 2022, the amount of 4,000 baht must be recorded in order to clear the accrued account.

Debit, salary and accrued wages 3,000

Salary and wages 1000

Credit Cash 4,000

* Debit expenses xxx - These are expenses on the income statement.

* Credit accrued expenses xxx - is a liability on the balance sheet.

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