Q:

What are examples of accrued revenue?

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Quick Answer

Examples of accrued revenue include interest payments made for loans, billing statements that have not yet been paid in full and completed services that have not yet been paid by customers, according to CliffsNotes. For instance, monthly payments on a two-year loan for $10,000 accrue for 24 months.

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Full Answer

Another example involves a consulting business, notes Accounting Tools. If Acme hires Brown LLC for a two-month consulting job at $100,000, the entire balance paid by Acme is not due until Brown LLC finishes the job. An initial payment of $50,000 is made to bring the consultants on board. The remaining $50,000 balance is paid at the end of the contract period, when Brown LLC finishes its work.

The first $50,000 payment for Brown LLC is a credit to its books. The other $50,000 is a debit until the job is completed. At the end of the two months, Brown has a full credit of $100,000 for the consulting job with Acme.

In another instance, suppose someone rents a car for one week but does not pay for the service until the car is returned. The income is earned by the rental company because the service is rendered, but the customer does not pay for the rental until the car is returned to the lot, as per the rental agreement. The rental company gets accrued revenue because the amount of the car was promised to the company later, notes Investopedia.

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