DEFINITION of 'Accrue'

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.


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.

  1. Accrued Expense

    An accounting expense recognized in the books before it is paid ...
  2. Savings Account

    A deposit account held at a bank or other financial institution ...
  3. Add-On Interest

    A method of calculating interest whereby the interest payable ...
  4. Accrual Accounting

    Accrual accounting is an accounting method that measures the ...
  5. Accrued Income

    Income that is earned in a fund or by company by providing a ...
  6. Accrued Interest

    1. A term used to describe an accrual accounting method when ...
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  1. How do I calculate compound interest using Excel?

    In simple terms, compound interest is interest on interest. It is the interest that accumulates on the principal deposit. ... Read Full Answer >>
  2. What is accrued interest, and why do I have to pay it when I buy a bond?

    A bond represents a debt obligation whereby the owner (the lender) receives compensation in the form of interest payments. ... Read Full Answer >>
  3. If different bond markets use different day-count conventions, how do I know which ...

    A day-count convention is a system used in the bond markets to determine the number of days between two coupon dates. This ... Read Full Answer >>
  4. Do dividends affect working capital?

    Regardless of whether cash dividends are paid or accrued, a company's working capital is reduced. When cash dividends are ... Read Full Answer >>
  5. Do prepayments provide working capital?

    Prepayments, or prepaid expenses, are typically included in the current assets on a company's balance sheet, as they represent ... Read Full Answer >>
  6. Does working capital include salaries?

    A company accrues unpaid salaries on its balance sheet as part of accounts payable, which is a current liability account, ... Read Full Answer >>

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