Which of the following best describes accrued (earned) revenue?

Accrued revenue refers to income that a business has earned for goods or services provided, but for which payment has not yet been received. This situation arises when a company performs a service or sells a product on credit, meaning the revenue is recognized on the income statement even if the cash has not yet been collected.

Choosing the option that states it has not yet been received in cash accurately reflects the essence of accrued revenue. The recognition of this revenue follows the accrual basis of accounting, which dictates that revenue should be recorded when it is earned, not necessarily when the cash is received. Thus, while the business has fulfilled its obligation to deliver a good or service, the actual cash flow will occur at a later date, confirming that the revenue is indeed accrued and not yet received.