Accrued Meaning: Definition, Examples, and Translations
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accrued
[əˈkruːd ]
Definition
financial context
Accrued refers to the accumulation of something over time, usually in relation to financial assets or liabilities. In accounting, it describes the recognition of revenue or expenses that have been incurred but not yet recorded. This principle ensures that financial statements present a fair view of the company's financial position.
Synonyms
accumulated, amassed, collected.
Examples of usage
- Interest accrued on the loan.
- The company's accrued expenses were reported in the balance sheet.
- She accrued vacation days throughout the year.
- The accrued revenue will be recognized in the next accounting period.
Translations
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Interesting Facts
Finance
- In finance, accrued interest is interest that has been accumulated over time but not yet paid out.
- Businesses often use accrual accounting to record revenues and expenses when they are earned or incurred, not when cash is received.
- Understanding accrued expenses helps companies forecast cash flow and manage budgets more effectively.
Law
- Accrued rights in legal contexts refer to benefits or entitlements that a person has already earned but may not yet have received.
- In labor law, employees may accrue vacation days, meaning they earn additional days off over time based on their employment period.
- Accruals in the legal field can affect the outcome of cases involving financial settlements or insurance claims.
Everyday Life
- Many people accrue loyalty points when shopping, which can lead to discounts or free items as they collect more.
- In personal finance, individuals can accrue savings in a bank account, earning interest over time.
- Accrued benefits in health insurance can mean that policies build up coverage based on how long someone has been enrolled.
Psychology
- The concept of accruing can relate to habits; good habits can build up over time and lead to significant personal development.
- People often feel a sense of achievement when looking back at things they have accrued in their lives, be it possessions or experiences.
- In behavioral economics, the idea of accruing benefits taps into the 'sunk cost fallacy,' where individuals continue to invest in endeavors based on accumulated resources.
Origin of 'accrued'
Main points about word origin
- The word 'accrued' comes from the Latin 'accruere,' meaning 'to increase' or 'to grow.'
- It first appeared in English around the 14th century, reflecting the concept of accumulating wealth or resources.
- Related terms like 'accrual' are often used in finance and accounting to describe earned income that hasn’t yet been received.
The term 'accrued' originates from the Latin word 'accruere,' which means to grow or to increase. It entered the English language in the early 17th century, primarily used in accounting and legal contexts. Over the years, the usage of the word has expanded to include various financial and business-related contexts, emphasizing the importance of recognizing and reporting income and expenses in a timely manner. In modern finance, accrued accounting is a crucial aspect, ensuring that all financial aspects are accurately recorded, reflecting the true financial standing of a business. The evolution of the word reflects the growing complexity of financial systems and the need for transparency in financial reporting.