CIMA BA3 Syllabus C. PREPARATION OF ACCOUNTS FOR SINGLE ENTITIES - Accrued and deferred Income. - Notes ^{4 / 20}

An entity will accrue income when it has earned the income during the period but it has not yet been invoiced or received.

This will increase income in the statement of profit or loss and be shown as a receivable in the statement of financial position at year end.

Accounting Treatment: Accrued Income

Dr Accrued income (SOFP)
Cr Income Account (I/S))

Accounting Treatment: Deferred Income

Dr  Cash (SOFP)
Cr Deferred Income (SOFP)

When we have received cash before earning it