Final answer:
Accrued revenue represents earnings that have occurred but have not yet been recorded as revenue, requiring an adjusting entry to correctly reflect them in the financial statements.
Step-by-step explanation:
The question pertains to the adjusting process in accounting, specifically about what accrued revenue represents. Prior to making adjusting entries, accrued revenue has been earned but has not been recorded as revenue on the financial statements. This situation occurs because the earning event happened before the cash was received, and an adjusting entry is necessary to recognize the revenue that was earned during the period but has not yet been recorded.