Accruals (type of adjusting entries) accumulate revenues that been earned and expenses that have been incurred. Accruals usually occur because companies provide or consume goods or services during a period; but don't initially record them because these are billed or paid at a later date or at the completion of the service. As a result, adjusting entries must be made at the end of the accounting period. In the case of accrued revenues, both assets (Receivables) and revenues increase. In the case of accrued expenses, both liabilities (Payables) and expenses increase.
