Definition

Sometimes payment process isn’t mentioned in any entry, or use techniques for using more earned income or revenue recognition is called Accrued revenue.

In some construction companies and major development, land firms use this method for capitalized in the company.

Example:

One of the most usual example like Land Development companies. They collect the amount or deposit of land from the customer and promise to complete in 2 or 3 years. The customer gets the final Paid bill at the completion date. Till that date, a customer just receives general bill copy.

In that case

  1. Accrued revenue         $10 M
  2. Revenue                      $10 M

For more entries example in the balance sheet or adjusted unearned revenue, you can ask for extra notes and example.

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