Net income for a period will be understated if accrued revenues are not recorded at the end of the accounting period.

Net Income

The total profit of a company after accounting for all costs and expenses, including taxes and operational expenses.

Accrued Revenues

Revenues that have been earned but not yet received in cash or recorded at the statement date.

Accounting Period

A specific period of time for which financial accounts are prepared, commonly a year or a quarter.