Accruals: unpaid expenses and unbilled revenue
Objective: Calculate and record accrued expenses and revenues.
Recommended first: Why adjusting entries exist
Accruals record amounts earned or incurred but not yet paid, billed, or received. Wages are accrued for days worked since the last payday; interest accrues with time (principal × annual rate × months ÷ 12); unbilled work is accrued at the agreed rate.
For interest, state the formula and the time convention. This course uses principal × annual rate × months ÷ 12 unless an exercise states a day count. For wages, count working days earned since the last payday through the period end. For unbilled revenue, multiply the work done by the agreed rate.
Check your work
- Is the time period correct?
- Is the formula shown?
- Is a payable or receivable recorded alongside the expense or revenue?
$12,000 note at 6% for one month: $12,000 × 6% × 1/12 = $60.
| Account | Debit | Credit |
|---|---|---|
| Interest Expense | $60.00 | |
| Interest Payable | $60.00 |
Common mistakes
✗ Using the annual rate for one month.
✓ Multiply by months ÷ 12.
Guided practice
Use hints freely here.
Item 1 of 1
Accrue unpaid wages
Corner Bean Café pays wages of $140.00 per working day every Friday. March 31 falls on a Tuesday, so 4 working days have been earned but not paid. Record the adjustment.
Independent practice
Try these without hints. Completing the lesson needs at least one independent item solved without revealing the answer.
Item 1 of 8
Accrue loan interest
Rise & Shine Bakery has a $36,000.00 note payable at 12% annual simple interest. No interest has been paid or recorded for the last 2 month(s). Record the Mar 31, 2026 adjustment.
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Key terms
- Accrual
- Recording something earned or incurred before cash moves.
References and provenance
- OpenStax, Principles of Accounting, Volume 1: Financial Accounting (accessed 2026-10-29)
Original lesson written for Bookkeeping Exercises (AI-assisted drafting). Calculations are verified by the platform's automated accounting tests. Not yet reviewed by a credentialed accountant. Updated 2026-10-29.