=+SA 5-2 Manual vs.

computerized accounting systems Like most businesses, when Manor Company renders services to another business, it is typical that the service is rendered “on account,” rather than as a cash transaction. As a result, Manor Company has an account receivable for the service provided. Likewise, the company receiving the service has an account payable for the amount owed for services received. At a later date, Manor Company will receive cash from the customer to satisfy the accounts receivable balance. However, when individuals conduct transactions with each other, it is common for the transaction to be for cash. For example, when you buy a pizza, you often pay with cash.