Accrual expenses & accrual revenue

Accrual expenses

An accrual allows the company to record expenses for which it expects and should pay for the services rendered / goods received during the current reporting period and to be paid in the future.

EXAMPLE	DEFINITION
- Service provided on credit but paid later - purchases with supplier on credit - Wages owed to employee	Accrual of expenses

Classic samples of accruals:

• Accounting fees
• Audit fees
• Corporate secretarial fees
• Tax compliance fees
• Consultancy fees
• Cost directly attributable to income
• Bonuses
• Salaries and wages
• Commissions and allowances
• Property taxes

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Accrued Revenue

Accrued revenue is money you expect to get for a service or product you already provided. Such as a customer owes you payment.

For instance, if you did an RM100 service to the customer, but the customer will pay in next month, you should note the RM100 as accrued revenue during the month.

To record this, you need to debit accounts receivable and credit the revenue to ensure the accuracy of sales.

EXAMPLE	DEFINITION
- Service/Job performed but customer paid later	Accrual of revenue

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