Confusable que........

Accrued Expense - An accounting expense recognized in the books before it is paid for. It is a liability, and is usually current. These expenses are typically periodic and documented on a company's balance sheet due to the high probability that they will be collected.

Hi Nithin!

I will explain this concept as per my understanding with an example.

You have invested Rs. 100,000 in a fixed deposit having a term of 2 years on 1st Jan 2010, The Interest in compounded half yearly every June 30th and December 31st. That means it is added to the FD principal amount.In The first year, the Interest paid is Rs. 5,000 on June 30th & 5,000 on Dec 31st. Now you finalise your accounts on 31st March every year. Hence the Interest from January to March is interest accrued and not due. i.e Rs. 2,500 (interest for 3 months) is accrued. It becomes due only on 30 th june. And it is finally Received after 2 years on maturity. Hence in the Balance Sheet on 31st Mar 2011 the Company will have to show the Interest of Rs. 2,500 under interest accrued but not due & Rs. 10,000 as interet due and not received.

That according to me is the difference between Accrued, Due, & Receipt

Regards