Final answer:
Among the options given, billing a customer for revenue earned but payment has not been received is an example of an accrual, because it associates revenue with the time period it is earned, not when the payment is received.
Step-by-step explanation:
The accrual concept is a foundational accounting principle that aligns revenues and expenses to the time periods in which they are earned or incurred, irrespective of when the cash transactions occur. An accrual is part of the adjusting entries that accountants make to apply this concept. In the context of the choices provided:
- A cash advance received from a customer before services are provided is a deferred revenue, not an accrual.
- Supplies purchased with cash but not yet used would be considered a prepaid expense, which is the opposite of an accrual.
- Billing a customer for revenue earned but payment has not been received is an example of an accrual because the revenue is recognized when it is earned regardless of when payment is made.
- Prepaying your landlord in cash for rent over the next 12 months is an example of a prepaid expense, not an accrual.
Therefore, the correct answer is (c) Billing a customer for revenue earned but payment has not been received.