What constitutes accrued revenue?

Accrued revenue refers to income that a business has earned but has not yet received in cash. This typically arises when services have been provided or goods have been delivered, but the payment has not yet been received. In this context, the concept emphasizes that the business recognizes revenue when it is earned, rather than when it is received.

The correct choice highlights the money owed to the business, which may be due to customers who have not yet made their payment for the services that have already been rendered. This recognition is in accordance with the accrual basis of accounting, which records revenues when they are earned and expenses when they are incurred, regardless of when cash transactions occur.

The other options do not accurately define accrued revenue. Money received in advance for services pertains to unearned revenue, where cash is received before the service is performed. Money paid for a future service describes a prepayment situation where cash changes hands before the service is delivered, and money received for completed services indicates that the revenue has already been collected, thus not qualifying as accrued revenue.