Business Glossary

to include an event on the accounting records regardless of whether any cash changed hands. For example, at the end of a fiscal year a company may accrue its income tax expense for that year, even though the money will not be paid for several months.

to accumulate. For example, under one of the dividend options of a participating life insurance policy, dividends can accumulate at interest by leaving them with the insurance company; cash values of life insurance accumulate at a given rate; employee retirement credits for pension benefits accumulate at a stipulated rate.

1. accumulate or increase.
   Example: XYZ Corporation borrowed $1,000,000 at 6% interest, payable annually at the end of the year. Each month $5,000 of interest on the loan accrued.

2. enter in financial records an amount that has not been paid or received.
   Example: Each month XYZ Corporation's accountant accrued $5,000 of interest expense on the financial statements.