Accrue

What is 'Accrue'

Accrue is the ability for something to accumulate over time. In finance, "accrue" is most commonly used when referring to interest, income and expenses of an individual or business. Interest in your savings account accrues so that over time the total amount in your account grows.

BREAKING DOWN 'Accrue'

In practice, the word "accrue" is often synonymous with the concept of accrual accounting, which has become the standard accounting practice for most companies. This form of accounting measures the performance and position of a company by recognizing economic events regardless of when cash transactions occur, which gives a better picture of the company's financial health.

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RELATED FAQS
  1. What is the difference between accrued expense and accrued interest?

    Learn the difference between accrued expense and accrued interest, and find out how to calculate accrued interest on a short-term ... Read Answer >>
  2. Why do businesses calculate accrued expenses?

    Find out why businesses calculate accrued expenses, how they are applied and what circumstances give rise to accrual entries ... Read Answer >>
  3. How is an accrued interest entry made in accounting?

    Learn how to create common journal entries for accrued interest, including adjusting entries and delayed bond issues sold ... Read Answer >>
  4. How do you find accrued interest on a bond?

    Learn how to determine the accrued interest on a bond. The price in the secondary market reflects the accrued interest the ... Read Answer >>
  5. What is the advantage of calculating accrued expenses over prepaid expenses?

    Learn about accrued expenses and prepaid expenses, the difference between accrued and prepaid, and advantages of accrued ... Read Answer >>
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    Understand how accrued revenue is accounted for on a company's financial statements. Learn through a specific example of ... Read Answer >>
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