What is accrued income?

Accrued income refers to income that has been earned during a specific accounting period but has not yet been received in cash or recorded in accounts receivable. This concept is important in accounting as it follows the accrual basis of accounting, where income is recognized when it is earned, regardless of when the payment is made.

In essence, accrued income represents a right to receive payment for services rendered or goods provided, which will be recognized in future financial statements once the cash is actually collected. This accounting treatment helps provide a more accurate picture of an entity's financial performance and position during a given period.

The other options describe different concepts in accounting. Income received before it is earned falls under the category of unearned income or deferred revenue. Income from past reporting periods does not apply as it does not pertain to the timing of its recognition within the current period. Overdue income that has not been collected would generally be classified as accounts receivable but does not encompass the broader definition of accrued income, which emphasizes the aspect of income being recognized when earned rather than when received.