cRYPTO Glossary

Accrued revenue arises when a business records sales without receiving payment for the goods or services sold at the time of the sale, typically because they do not invoice the customer immediately.

Explanation of Specific Terms:

• Sales: The exchange of goods or services for money or other consideration.
• Without receiving payment: Payment from the customer has not been received at the time of the sale.
• Goods or services sold: Products or services provided to customers in exchange for revenue.
• Not invoice the customer at the time of the sale: The invoice for the sale is issued after the goods or services have been delivered or provided.

Key Points for Beginners:

• Why it's important: Accrued revenue allows businesses to recognize income as it is earned, even if cash has not yet been received, providing a more accurate picture of financial performance.
• How it works: For example, a consulting firm may provide services to a client in January but invoice the client in February. The revenue for January is accrued in January's financial statements, even though the invoice is issued later.