## Accrue means to accumulate or to tally up the amount.

Let’s say I pay all my workers combined \$10,000 for a five day week and August ends on a Wednesday. I pay my workers \$10,000/ 5 =\$2000 per day. If I am compiling the income statement for August, I would want to know how much I owed in salary for this month. \$2000 times 3 days =\$6000 is owed. I owe them \$6000 for this month, but I’m not actually paying them until payday. I would put the extra \$6000 as salary expense on August’s income statement as an accrued expense. Let’s say I charged my client \$500 per month for advertising in my paper, but I only bill him every quarter. At the end of one month I would have earned \$500 even though I hadn’t yet received any money. That \$500 worth of income would go on the August income statement as accrued revenue. Both the revenue and the expense are accruals because I tallied up what I owe, but haven’t paid yet and I tallied up what my customer owes me, but I haven’t yet received any money.