Now about accruals, below description about accruals!
a. Accrued expenditure
Invoices received from suppliers represent accrued expenditure in one sense of the term, but the expression is more strictly used to cover expenditure accrued but not yet evidenced by a formal invoice or bill from the creditor.

If accounts are made up to 31st December and rent payable quarterly has not been paid for the quarter ending on 31st December, clearly one quarter’s rent has accrued and must be included in the account: (a) in the capital section of the accounting system as a liability, and (b) in the revenue accounts (expenditure division) as a charge.

Even where actual payment is not due to be made, expenditure may have accrued. If interest on a loan is payable annually on Lady Day, 25th March, annual accounts drawn up to 31st December must include approximately nine months’ proportion of annual interest which is deemed to accrue from day to day and approtionable in repsect of time accordingly. Similarly, adjustments are required for such items as rates, fixed interest due on loans, and proportions of wages and salaries not yet paid.

The entries to be made in the accounts in respect of accruals follow precisely the same procedure as for outstandings, using the Suspense Creditors and Suspense Debtors Accounts or separate suspense accounts as may be convenient.

b. Accrued income
Accrued income covers the appropriate proportion of income receivable but not paid and probably not evidenced by a bill or invoice. The kind of income to be included in this category includes for example, rents, interest and commission receivable. In this connection, however, it is necessary to point out that a sound accounting principle derived from experience is that whilts accrued expenditure must always be recorded as a charge and a liability in the accounts, accrued income must be reviewed in the light of the possibility that it may not be received. Thus, where a tenant was already in default with past rent and there was no guarantee that current rent would be forthcoming it would be incorrect to credit the rent account or the total of debtors with the rent due.