What is accrual in accounting?

Interest paid is the amount the borrower paid on the loan and was received by the lender. The interest accrued is the interest that charged. For example I have a loan on which the interest is 1% per month on the unpaid balance on the last day of the month. If I were to miss a couple of payments the interest accrued for the year would be greater than the payments made. It sounds as though your exam question is only asking you to account for the payments made.