Interest accrued but not yet due

It means that as per accrual system of accounting interest has already been accrued but we don't have legal right to receive it as per lending agreement. If interest is payable monthly we are earning interest every second theoretically but we get entitlement to it only on 31st of every month so interest amount at every dates of a month is called accrued but not due as it will be due only after last date.

This is basically provision made for accrued interest in the balance sheet thereby increasing your profit for that particular period and then reversing it in the preceeding year when the interest is actually received on maturity.   

Suppose there is an employee whose month ends on 31.01.2013. But he is entitled to receive his salary on 7th of next month, i.e, on 07.02.2013. So on 31st his salary is accrued but not due.