Definition of 'Accrued Revenue'
Accrued revenue is important because it helps companies to accurately reflect their financial performance. By recording accrued revenue, companies can ensure that they are not overstating their profits. Accrued revenue can also be used to estimate future cash flows. For example, a company that knows how much accrued revenue it has can estimate how much cash it will receive in the future.
There are two main types of accrued revenue:
* Accounts receivable: This is the amount of money that a company is owed by its customers. Accounts receivable are created when a company sells goods or services on credit.
* Deferred revenue: This is the amount of money that a company has received in advance for goods or services that have not yet been provided. Deferred revenue is created when a company receives payment for goods or services that will be provided in the future.
Accrued revenue is an important concept for understanding how companies account for their revenue. By understanding accrued revenue, you can better understand a company's financial performance and cash flows.
Do you have a trading or investing definition for our dictionary? Click the Create Definition link to add your own definition. You will earn 150 bonus reputation points for each definition that is accepted.
Is this definition wrong? Let us know by posting to the forum and we will correct it.