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What is Accrued Revenue?

Revenue that has not yet been received for goods or services already rendered may be documented as Accrued Revenue.

Accrual accounting allows a business to put the payments due to it for good and services already rendered into the Assets column of its books. If no invoice or payment plan is established, it sits in the Accrued Revenue line; if so, the item goes into Accounts Receivable.

Accrual accounting is different than cash accounting in this regard: cash accounting will only make an entry on the books when cash or goods are exchanged. Accrual accounting is actually mandatory for publicly traded companies with revenues over $5 million who are based in the US, per SEC regulations.

Keywords: Securities and Exchange Commission (SEC), accounts receivable, accrual accounting, revenue, cash accounting,