What is Outstanding Income?

Outstanding income means the income that is earned but not yet received. In accounting, it is shown as an asset because the business has a right to receive it in the future. Outstanding income refers to the amount of money that a business has already earned but has not yet collected from the customer or client.

It is also called accrued income. For example, if a business rents out property and the tenant has not yet paid the rent for the month, that unpaid rent becomes outstanding income. This income is due and will be received later, so it is added to the income side of the Profit and Loss Account and shown as an asset in the Balance Sheet.

Key Features of Outstanding Income

• It is an income already earned.
• Payment is pending but guaranteed.
• It is treated as an asset in accounting.
• Also known as accrued income.
• Recorded in the books of accounts as a current asset.

Examples of Outstanding Income

Importance in Accounting

• Helps in showing the true financial position of the business.
• Ensures that income is recorded in the correct accounting period.
• Follows the accrual basis of accounting.