accrue

(verb)

To increase, to augment; to come to by way of increase; to arise or spring as a growth or result; to be added as increase, profit, or damage, especially as the produce of money lent.

Related Terms

  • depreciation
  • liability
  • revenue

(verb)

(intransitive, accounting) To be incurred as a result of the passage of time.The monthly financial statements show all the actual but only some of the accrued expenses.

Related Terms

  • depreciation
  • liability
  • revenue

Examples of accrue in the following topics:

  • Differences Between Accrued and Deferred Expenses

    • Accrued and deferred expenses represent the two possibilities that can occur due to timing differences under the matching principle.
    • Accrued expenses and deferred expenses are two examples of mismatches between when expenses are recognized under the matching principle and when those expenses are actually paid.
    • An accrued expense is a liability that represents an expense that has been recognized but not yet paid.
    • Accrued and deferred expenses are both listed on a company's balance sheet.
  • Terminology of Accounting

    • The term accrual is also often used as an abbreviation for the terms accrued expense and accrued revenue.
    • Accrued revenue (or accrued assets) is an asset, such as unpaid proceeds from a delivery of goods or services, when such income is earned and a related revenue item is recognized, while cash is to be received in a later period, when the amount is deducted from accrued revenues.
    • An example of an accrued expense is a pending obligation to pay for goods or services received from a counterpart, while cash is to be paid out in a latter accounting period when the amount is deducted from accrued expenses.
  • Recognizing Notes Receivable

    • In accounting, notes receivables are accounts to keep track of accrued assets that have been earned but not yet received.
    • In accounting, notes receivables are accounts to keep track of accrued assets that have been earned but not yet received.
    • Accrued assets are assets, such as interest receivable or accounts receivable, that have not been recorded by the end of an accounting period.
    • We also call these adjustments 'accrued revenues' because the revenues must be recorded.
  • Importance of Recognition and Measurement

    • Accrued expense allows matching future costs of products to the proceeds from their sales prior to paying out such costs.
    • Accrued expenses are a liability with an uncertain timing or amount; the uncertainty is not significant enough to qualify it as a provision.
    • One example would be an obligation to pay for goods or services received from a counterpart, while the cash is paid out in a later accounting period—when its amount is deducted from accrued expenses.
    • Accrued expenses shares characteristics with deferred revenue.
    • Deferred expenses share characteristics with accrued revenue.
  • Valuing Notes Receivable

    • Accrued revenue (or accrued assets) is an asset such as proceeds from a delivery of goods or services, at which such income item is earned and the related revenue item is recognized, while cash for them is to be received in a latter accounting period.
    • At that point its amount is deducted from accrued revenues.
  • Gain Contingencies

    • If the gain is probable and quantifiable, the gain is not accrued for financial reporting purposes, but it can be disclosed in the notes to financial statements.
    • Thus, for a gain contingency, only a realized gain is accrued for and disclosed on the income statement.
    • However these gains should only be accrued when the gain is realized.
  • Impairment Recognition

    • An impairment loss is recognized and accrued through a journal entry to record and reevaluate the asset's value.
    • An impairment loss is recognized and accrued to record the asset's revaluation.
  • Bonds Payable and Interest Expense

    • Valley must make an adjusting entry on December 31 to accrue interest for November and December.
    • Each year Valley would make similar entries for the semiannual payments and the year-end accrued interest.
  • Adjustments

    • Accruals - accrued revenues are revenues that have been recognized (that is, services have been performed or goods have been delivered), but their cash payment have not yet been recorded or received.
    • Accrued expenses have not yet been paid for, so they are recorded in a payable account.
    • Expenses for interest, taxes, rent, and salaries are commonly accrued for reporting purposes.
  • Reversing Entries

    • Most often, the entries reverse accrued revenues or expenses for the previous period.
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