How do you make accrual adjustments?

Accruals are made for expenses or revenue that belong in a period but for which payment has not been made or a billing has not been sent. There are many examples for this. For example, you might need to accrue for interest that is owed but you have not yet paid it. The entry would be to debit Interest Expense and credit Interest Payable. You might have rental income due for a building you are renting to another company but they haven't paid yet, the entry would be to debit a receivable and credit Rental Income.

Basically, if you are accruing an expense you will debit the expense and credit a payable. If you are accruing for income that has been earned, you will debit a receivable and credit an income account.

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