Question

Accrued income is credited to the profit and loss account and shown in the balance sheet as a current asset. Why?

Answer 1

Under the accrual concept of accounting, income is recognised when goods or services have been sold, whether the amount has been received or not. Since it is income, it is credited to the profit and loss account. And since the amount is due to the enterprise, it is shown as a current asset in the balance sheet.